Warner Bros Discovery (WBD) has rejected Paramount’s $108 billion (€92 billion) hostile bid as “inadequate” despite a personal pledge from Oracle co-founder and billionaire Larry Ellison to backstop financing for the takeover.
In a letter to shareholders released on Wednesday, WBD’s board insisted that the $83bn deal agreed last month with Netflix for its studio and streaming business was superior to Paramount’s offer for the entire company, including its legacy TV assets such as CNN.
WBD said the Paramount proposal would be “in effect ... the largest leveraged buyout in history”, resulting in WBD taking on $54 billion in debt from lenders including Bank of America, Citigroup and Apollo to finance the deal.
“This aggressive transaction structure poses materially more risk for WBD” than the Netflix proposal, the board said of Paramount’s financing plan. “The extraordinary amount of debt financing ... heightens the risk of failure to close [the deal].”
READ MORE
The WBD board, which voted unanimously on Tuesday to reject the latest offer, has repeatedly shot down Paramount’s attempts to combine two of Hollywood’s most famous studios, both of which have roots in the silent film era. Instead, it has accepted the bid from Netflix, which has achieved a $400 billion market value by disrupting the foundations of the traditional movie industry.
Paramount, which made its first approach to buy the legendary Hollywood studio in September, said on December 22 that Ellison had agreed to provide an “irrevocable personal guarantee” covering $40.4 billion of equity financing for the WBD bid, which is being led by his son David Ellison.
[ Media in 2025: the shadow of Trump hangs over everythingOpens in new window ]
The move was designed to address WBD’s concern that the Paramount bid was not personally guaranteed by Ellison.
WBD chair Samuel Di Piazza told CNBC on Wednesday that the board was “very open” to a deal with Paramount but that it had to put “something on the table that is compelling”.
Paramount must now decide whether to continue to take its existing $30 per share bid to WBD shareholders or raise its offer and address the new criticisms outlined by WBD’s board.
WBD shareholders have until January 21st to decide whether to tender their shares under Paramount’s offer.
Paramount, which did not immediately respond to requests for comment, previously said its last offer did not represent a “best and final” proposal.
Ireland’s record tax take makes light of Trump tariffs fear
The WBD board highlighted other issues in its shareholder letter, including potential costs of backing out of the Netflix deal. WBD said it would incur $4.7 billion in costs if it reversed course and accepted the Paramount offer, including a $2.8bn termination fee to Netflix.
Netflix said on Wednesday that it had submitted a mandatory pre-merger notification with regulators and was now engaging with competition authorities, including the US Department of Justice and European Commission.
Ted Sarandos and Greg Peters, co-chief executives of Netflix, said in a statement that “the WBD board remains fully supportive of and continues to recommend Netflix’s merger agreement, recognising it as the superior proposal”. When announcing their merger agreement last month, Netflix and WBD said the deal was expected to close in 12-18 months.
Unlike Netflix, Paramount is seeking to buy the company’s legacy television and cable assets such as CNN, TNT and Discovery Channel. Netflix plans to acquire WBD after it spins off its cable TV business, which is scheduled to happen this year.
WBD touted the appeal of the spin-off of the cable unit, Discovery Global, to its shareholders in the letter. Comcast tested the waters with a similar cable spin-off this week. Shares of the spin-off, Versant, fell nearly 23 per cent in the first two days of trading.
Both cable groups have suffered subscriber losses due to cord-cutting and the rise of streaming. However, WBD rejected the idea that Versant was a “comparable” company to Discovery Global, which it said in a regulatory filing on Wednesday had “greater scale” and a “strong international presence”. – Copyright The Financial Times Limited 2026
