Warner Bros. Discovery’s board has once again turned down a bid from Paramount and advised shareholders to stick with Netflix’s competing offer. In a message to shareholders, Warner Bros.’ board characterized Paramount’s revised hostile bid of $108.4 billion US as a risky leveraged buyout that investors should steer clear of. The board emphasized that Paramount’s proposal relies heavily on debt financing, increasing the risk of completion. It reiterated its support for Netflix’s $82.7-billion deal for the film and television studio along with other assets.
Warner Bros. possesses highly sought-after entertainment franchises including “Harry Potter,” “Game of Thrones,” “Friends,” the DC Comics universe, as well as classic films like “Casablanca” and “Citizen Kane.” Paramount and Netflix have been in a fierce competition to acquire Warner Bros., which includes its valuable film and television studios and extensive content library.
Warner’s leadership has consistently rejected Paramount’s offers, urging shareholders to endorse the sale of the streaming and studio business to Netflix. Paramount recently secured an “irrevocable personal guarantee” from Oracle founder Larry Ellison to support $40.4 billion in equity financing for its bid. However, Warner Bros.’ board argued against Paramount’s $30-per-share cash offer, expressing concerns about the substantial debt burden Paramount’s financing plan would impose.
Netflix’s proposal focuses solely on acquiring Warner’s studio and streaming business, including platforms like HBO Max. In contrast, Paramount seeks to acquire the entire company, encompassing networks such as CNN and Discovery. The impending merger faces intense antitrust scrutiny, likely prompting reviews by regulatory bodies in the U.S. and abroad.
Both Netflix and Paramount’s bids could significantly impact the entertainment industry, including movie production, distribution channels, and the news media landscape. The decision on the acquisition deal is anticipated to have political implications, with U.S. President Donald Trump hinting at potential involvement in the approval process.