Key Points
- The bid rejected due to inadequate financing assurances.
- Paramount’s $30-per-share offer described as “illusory”
- Warner Bros. Discovery shares fell 1.4%
- Paramount has submitted six bids to acquire Warner Bros. Discovery
- Paramount remains a major Hollywood studio but lags behind Disney, Universal, and Warner Bros
NEW YORK, United States: The Warner Bros. Discovery board on Wednesday rejected Paramount’s $108.4 billion takeover offer, citing insufficient financing assurances.
In a letter to shareholders, the board stated that Paramount had repeatedly misled Warner Bros. shareholders that its $30-per-share cash offer was fully guaranteed or backstopped by the Ellison family, led by billionaire Oracle CEO Larry Ellison.
“It does not, and never has,” the board wrote of the guarantee of Paramount’s offer, noting that the offer posed “numerous, significant risks.”
“The Warner Bros Discovery Board reinforced that Netflix’s merger agreement is superior and that our acquisition is in the best interest of stockholders,” its co-CEO Ted Sarandos said in a statement.
Warner Bros. Discovery shares fell 1.4% to $28.50 in premarket trading, while Netflix rose 1.5% and Paramount declined 1.8%.
Paramount has submitted a total of six bids to acquire Warner Bros. Discovery, including its television networks such as CNN and TNT Sports.
In its evaluation, the Warner Bros. Discovery board considered regulatory risks for both the Netflix and Paramount offers and concluded that either transaction could secure the necessary U.S. and international regulatory approvals.
Netflix’s proposal also included a $5.8 billion breakup fee, higher than Paramount’s $5 billion.
The board described the Paramount offer as “illusory,” noting that it could be terminated or amended at any time prior to closing, unlike a binding merger agreement.
“The PSKY offer provides an untenable degree of risk and potential downside for WBD shareholders,” the board wrote.
Paramount submitted multiple offers starting in September to forge an entertainment powerhouse capable of challenging Netflix and tech giants such as Apple that have expanded into media but faced rejections.
Paramount remains one of Hollywood’s major studios, but its box office record has been uneven, with occasional franchise wins offset by periods in which its slate has trailed Disney, Universal, and Warner Bros in US market share.
