Warner Bros Discovery Board Rejects Paramount Skydance's Hostile Takeover Bid Again

On Wednesday, the board of directors of Warner Bros Discovery took a stand against Paramount Skydance's hostile takeover bid for the second time, advising shareholders to reject the offer. This development comes as Paramount seeks to enter the acquisition agreement that Warner Bros Discovery had already cemented with Netflix. This isn't the first time the board has dismissed Paramount's overtures; a similar rejection occurred in December. In a letter sent to shareholders, Warner Bros Discovery's board reiterated their belief that Netflix's bid of $83 billion is superior to Paramount's offer, which the board has deemed questionable and lacking in credibility. They highlighted concerns over Paramount's high level of debt, characterizing the offer as a risky leveraged buyout—an acquisition strategy where borrowed funds are used alongside the investor's own capital. Paramount Skydance now faces a critical decision: whether to enhance their offer to sway Warner Bros Discovery's shareholders or to continue advocating that their proposal holds more merit compared to Netflix's. The term 'hostile' applies to this takeover attempt, as it seeks to gain control of a company against the explicit wishes of its board of directors. Paramount's latest offer stands at $108 billion, equating to approximately $30 per share for Warner Bros Discovery, while Netflix's offering is calculated at $27.75 per share. Initially, Paramount's bid had garnered support from Affinity Partners, an investment firm led by Jared Kushner, son-in-law of former President Donald Trump; however, this firm withdrew its support in December. To bolster confidence among shareholders, Larry Ellison, father of Paramount's CEO David Ellison, has assured that he could personally back the operation with over $40 billion. Despite this support, the sale of Warner Bros remains controversial within Hollywood, with many expressing discontent over its potential outcome. Related Sources: • Source 1 • Source 2