Warner Bros. Discovery’s board has formally rejected Paramount Skydance’s $108.4 billion hostile takeover bid, stating that the proposal fails to provide credible, unconditional financing assurances and poses significant risks to shareholders.
In a letter to shareholders disclosed in a regulatory filing on Wednesday, the board said Paramount repeatedly misrepresented its $30-per-share cash offer. They claimed it was fully guaranteed by the Ellison family, led by Oracle founder Larry Ellison. The board stated that the claim was incorrect.
“It does not, and never has,” the board wrote. They added that the proposal carried “numerous, significant risks” and lacked the certainty required for a transaction of this scale.
The board said Paramount’s offer was inferior to Warner Bros Discovery’s existing merger agreement with Netflix. Under that deal, Netflix has offered $27.75 per share to acquire Warner Bros’ film and television studios. The agreement includes its content library and the HBO Max streaming service. The board stated the agreement is fully binding, requires no equity financing, and is supported by strong debt commitments.
Warner Bros Discovery chairman Samuel DiPiazza told CNBC that a shareholder vote on the Netflix deal is expected in spring or early summer. However, a date has not yet been set.
Paramount did not immediately respond to a request for comment. Meanwhile, Netflix welcomed the decision, with co-chief executive Ted Sarandos saying the board reaffirmed that Netflix’s proposal is in shareholders’ best interests.
Warner Bros Discovery faced a major decision as its board was likely to recommend rejecting Paramount's $108.4 billion bid, opting instead to support Netflix's $72 billion buyout offer for its studios and streaming division https://t.co/KZ00GhQIex pic.twitter.com/bdYwbuNbHU
— Reuters (@Reuters) December 17, 2025In premarket trading, Warner Bros Discovery shares slipped 1.4% to $28.50. Netflix shares rose 1.5%, while Paramount fell 1.8%.
Paramount took its case directly to Warner Bros. Discovery shareholders last week. They claimed it had secured “air-tight financing,” including $41 billion in new equity commitments from the Ellison family and RedBird Capital. Alongside $54 billion in debt commitments from Bank of America, Citi, and Apollo.
However, the Warner Bros Discovery board countered that Paramount’s latest proposal included no direct equity commitment from the Ellison family. Instead, it relied on backing from what the board described as an “unknown and opaque” Lawrence J. Ellison Revocable Trust, whose assets and liabilities are not publicly disclosed and can change at any time.
“A revocable trust is no replacement for a secured commitment by a controlling shareholder,” the board said. They added that the trust’s liability was capped and its assets could be withdrawn.
The board also raised concerns about Paramount’s financial strength and post-merger leverage. It noted that Paramount has a market capitalisation of about $15 billion and a credit rating just above junk status. Following a merger, Paramount’s debt would rise to about 6.8 times operating income, with limited free cash flow.
By contrast, the board highlighted Netflix’s investment-grade balance sheet and market capitalisation exceeding $400 billion. Netflix has also indicated that it will continue to release Warner Bros. films in cinemas, addressing concerns about reduced theatrical output.
The board criticised Paramount’s proposed $9 billion in synergies as operationally ambitious. They warned that achieving them would likely trigger further job losses. The board said this would weaken Hollywood rather than strengthen it.
Read: Paramount Makes $108.4B Hostile Bid for Warner Bros, Topping Netflix Offer
Responding to Paramount’s claims of unfair treatment, the board said it had engaged extensively with Paramount and Skydance principals. They held dozens of calls and meetings, including in-person discussions with Warner Bros Discovery CEO David Zaslav and Paramount leadership.
“Despite repeated feedback and suggested remedies, Paramount Skydance has never submitted a proposal superior to the Netflix merger agreement,” the board said.
The board added that, while it considered regulatory risks for both transactions, it believes either deal could secure regulatory approval. It also noted that Netflix’s $5.8 billion breakup fee exceeds Paramount’s $5 billion fee. Ultimately, the board described Paramount’s offer as “illusory.” They said it could be amended or withdrawn before completion. Also, it lacked the certainty of a binding merger agreement.
“The Paramount Skydance offer presents an untenable level of risk and downside for Warner Bros Discovery shareholders,” the board concluded.
