Warner Bros. Discovery has rejected a $108.4bn hostile takeover offer from Paramount Skydance, choosing instead to press ahead with a previously agreed deal with Netflix.
According to Reuters, the board of Warner Bros. Discovery (WBD) said it had formally turned down Paramount Skydance’s unsolicited offer to buy the company for $30 a share in cash.
Although the bid valued WBD at $108.4bn, one of the largest figures ever attached to a media takeover, the board argued that the proposal carried too much risk. Shareholders, it said, would be better served by supporting the planned merger with Netflix.
At the heart of the board’s decision was money, and how solid it really was.
Paramount Skydance, led by David Ellison, launched its hostile approach earlier this month, shortly after WBD struck a binding agreement with Netflix covering its film studios, HBO Max and other major assets. The timing was no accident: Paramount hoped a higher price would tempt investors to overrule management.
But in a regulatory letter to shareholders, WBD’s board said the financing behind the Paramount bid was far from secure. Paramount had claimed the deal was “fully backstopped” by the Ellison family. In reality, the board said, the equity funding came from a revocable trust controlled by the family, with no binding or enforceable commitment.
“That matters more than it might sound. If financing can be changed or withdrawn, a deal can fall apart suddenly, leaving shareholders with months of uncertainty and a weakened company. Boards are expected to avoid that kind of risk, even when a higher price is on the table.”
Why Netflix won the board’s support
The Netflix agreement, while offering a lower price of $27.75 per share, is built on firmer ground. It includes cash and stock, clear debt financing, and binding commitments from Netflix, a public company with deep pockets and reliable access to capital markets.
Netflix’s scale also played a role. With a market value well above $400bn, it can absorb large acquisitions without stretching its balance sheet. For WBD’s directors, that reduced the chances of last-minute renegotiation or collapse.
In plain terms, the board chose certainty over headline value.
Paramount’s offer technically remains open until early January, and shareholders can still choose to back it. Even so, a hostile bid opposed by the board faces long odds.
A shareholder vote on the Netflix transaction is expected in 2026, with regulatory reviews likely to shape the final outcome.
