Warner Bros. Discovery’s board of directors has unanimously rejected Paramount Skydance’s all-cash bid to acquire the company, valued at around $108 billion. The rejection comes after the WBD board accused Paramount Skydance of consistently misleading shareholders about the financing behind its takeover bid, calling it inferior to Warner Bros.’ planned merger with Netflix.
According to a detailed letter released by WBD, the board concluded that Paramount’s tender offer launched on December 8 is “not in the best interests” of WBD shareholders and does not qualify as a “Superior Proposal” under the company’s existing merger agreement with Netflix. The board recommended that shareholders back the Netflix transaction and not tender their shares into the Paramount offer.
Netflix welcomed the recommendation from the WBD board, saying it is “highly confident” that regulators will see the deal as pro-consumer, pro-innovation, and pro-competition. The company reiterated its confidence in closing the deal within 12 to 18 months after customary regulatory approvals.
The WBD board criticized Paramount’s repeated public assertion that its proposal was backed by a “full backstop” equity commitment from the Ellison family, which controls Skydance Media. They argued that this claim was misleading and relied on an unknown and opaque revocable trust for the certainty of the deal funding.
In contrast, the Netflix merger is framed as superior because it is fully financed, binding, and backed by a company with a market capitalization above $400 billion. Under the Netflix deal, WBD shareholders would receive $23.25 in cash and $4.50 in Netflix stock, plus shares in Discovery Global.
The rejection comes after President Donald Trump attacked Paramount’s ownership of CBS News and 60 Minutes, followed by Jared Kushner withdrawing from the Paramount bidding group. The WBD board warned that a successful takeover by Paramount would saddle the combined entity with an estimated 6.8x debt-to-Ebitda leverage ratio and “virtually no current free cash flow” before synergies.
The article also notes that the deal would expose investors to substantial additional costs and downside, including a $2.8 billion termination fee if the offer fails.
Source: https://fortune.com/2025/12/17/warner-bros-rejects-paramount-no-ellison-backstop-illusory-offer-netflix