Warner Bros Discovery is planning to recommend to its shareholders as soon as Wednesday that they reject Paramount’s $108 billion (€92 billion) hostile bid, with the Hollywood group sceptical that Oracle co-founder Larry Ellison will backstop the deal.
WBD was close to finalising a response to Paramount’s tender offer after the business run by David Ellison went directly to shareholders last week with its all-cash, $30-per-share takeover offer, after losing out to Netflix in an auction for the studio and streaming company, said people familiar with the matter.
WBD is expected to outline four central criticisms of Paramount’s offer in its filing, which argues that its value, financing and terms are deficient compared with Netflix’s deal agreed earlier this month.
The filing from WBD was pending final approval from its board of directors, the people said, and the timing could still slip. WBD’s share price was trading at about $29 a share on Tuesday, suggesting that investors were expecting Paramount to sweeten its bid.
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In a further twist on Tuesday, Jared Kushner’s investment firm Affinity Partners, which had been backing the Paramount offer, pulled out.
“With two strong competitors vying to secure the future of this unique American asset, Affinity has decided no longer to pursue the opportunity,” Affinity said.
It added: “The dynamics of the investment have changed significantly since we initially became involved in October. We continue to believe there is a strong strategic rationale for Paramount’s offer.”
WBD and Paramount declined to comment.
WBD investors who have spoken with the company’s senior management said the group was confident in Netflix’s proposal but remained open to a new Paramount offer that addressed their funding concerns and raised the bid.
Paramount has accused WBD’s board of not appropriately replying to its last offer, which also stated that it was not “best and final”, indicating that the Ellisons are willing to pay more for the company.
Netflix’s proposal values WBD’s streaming and studio assets at nearly $83 billion. The Netflix offer is worth $23.25 in cash and $4.50 in stock per share. It does not include the remaining television assets, including CNN, which WBD has been valuing between $3 and $5 a share.
David Ellison, Paramount’s chief executive and Larry Ellison’s son, has also said the Netflix bid was likely to face more regulatory scrutiny than the Paramount approach, meaning there is greater risk the deal will not close.
WBD’s board is poised to reject such claims, arguing that Paramount’s bid is less certain as it is backed by the Ellison family trust, which is worth close to $250 billion in Oracle stock, rather than personally by Larry Ellison, who is among America’s richest people.
Netflix has offered a $5.8 billion termination fee, a high amount for M&A transactions, a sign it is confident it can get all the regulatory approvals.
Questions are expected to be raised about whether regulators would pose objections to the level of money being drawn from sovereign wealth funds in Qatar, Saudi Arabia and Abu Dhabi. Combined, these funds have pledged $24 billion to the deal – twice what the Ellisons are contributing.
A person close to Paramount said Kushner’s exit from the offer was meant to smooth over the bid’s path with WBD’s board and strip out the “noise” about his ties to President Donald Trump. The person added that his withdrawal had no bearing on the Middle Eastern backing.
Even without Kushner, Trump’s son-in-law, Paramount has been viewed as closer with the administration than Netflix due to the Ellisons’ relationship with the president.
But Netflix has made inroads in Trump’s Washington.
Brian Ballard, a Trump fundraiser who runs the top lobbying firm in Washington by 2025 revenue, has relinquished Paramount and retained Netflix as a client.
Patrick Kilcur, who Ballard hired last year from the Motion Picture Association, confirmed the firm’s decision on Tuesday but declined to elaborate. – Copyright The Financial Times Limited 2025
