Warner Bros. Discovery rejects Paramount’s hostile bid, calls offer ‘illusory’

Warner Bros. Discovery (WBD) has firmly turned down Paramount Skydance's $108 billion hostile takeover bid, labeling it as 'illusory' and accusing the company of misleading its shareholders regarding financial backing. In a letter addressed to shareholders, WBD's board emphasized its commitment to honoring a prior agreement with Netflix, asserting that Paramount had continuously misrepresented the validity of their proposed deal, claiming it had a 'full backstop' from the Ellison family. The board strongly refuted this claim, stating, 'It does not, and never has.' Furthermore, WBD highlighted that Paramount's offer falls short when compared to the Netflix merger. Netflix's proposal, which values Warner Bros. at $27.75 per share, represents a binding agreement with enforceable commitments, eliminating the need for any equity financing and backed by solid debt commitments. Following the rejection, Netflix expressed satisfaction with WBD's stance. Co-CEO Ted Sarandos remarked that the decision underscores the superiority of their merger agreement, stating it is in the best interest of shareholders. As this unfolds, Paramount and its supporters, including tech magnate Larry Ellison, are reportedly contemplating whether to adjust their offer in response to WBD's rejection, as reported by Variety.