Warner Bros Discovery Board Rejects Paramount's Bid, Backs Netflix Offer Amidst Hostile Takeover Battle

In a significant development in the ongoing takeover battle for Warner Bros Discovery, the company's board of directors has officially rejected a billion-dollar offer from Paramount Skydance, signaling strong support for the rival bid from Netflix. This decision comes as part of the board's wider strategy to secure the best outcome for shareholders. The Paramount bid, valued at $10.84 billion, was deemed inadequate by the Warner board due to its lack of financing guarantees and overall inferior terms compared to those provided by Netflix. In a letter to shareholders released on Wednesday, the board outlined its reasoning and expressed confidence in Netflix's offer. Earlier in the month, Netflix proposed a more attractive deal, comprising both cash and stock valued at about $27 per share, summing up to a total offer that approximates $72 billion. This proposal includes not only Warner Bros' film and television studios but also its extensive content library and the streaming service HBO Max. Contrastingly, Paramount CEO David Ellison made a direct appeal to Warner's shareholders just last week, proposing a cash offer of $30 per share for all segments of the company. However, the Warner board quickly countered claims from Paramount, insisting that the $30 cash offer was not fully guaranteed as claimed by Ellison's family, particularly considering the implications of its financing structure. The board criticized the Paramount bid for relying on an unknown trust structure, stating, "It is not and it never was guaranteed." Moreover, concerns have been raised that a successful Paramount takeover could lead to significant job losses due to proposed savings of $9 billion through possible synergies. This could adversely affect the industry, as pointed out by the Warner board, which highlighted the potential job cuts as a detrimental factor that would ultimately weaken Hollywood rather than strengthen it. As the battle for Warner Bros Discovery unfolds, the board's clear endorsement of Netflix's binding agreement marks a crucial move in the competitive media landscape, where strategic mergers and acquisitions are pivotal for growth and sustainability. Related Sources: • Source 1 • Source 2