WBD board rejects Paramount bid, backs Netflix deal
In a statement, the Warner Bros. Discovery board of directors said it unanimously concluded that the Paramount Skydance tender offer is not in the best interests of shareholders. The board reaffirmed its support for the agreement with Netflix, which was announced earlier this month, Qazinform News Agency correspondent reports.
Why WBD favors Netflix
According to WBD, the Netflix merger offers a clearer and more reliable outcome. Under the deal, WBD shareholders would receive $23.25 in cash per share, plus $4.50 cents in Netflix stock. Shareholders would also receive shares in a new company, Discovery Global, which is expected to be separated from WBD at a later stage.
The board said this package offers higher and more predictable value than the Paramount Skydance proposal. Directors described the Paramount offer as non-binding and said it could be changed or withdrawn at any time.
A major concern raised by WBD is financing. The company said Paramount Skydance has not secured a firm equity commitment from the Ellison family, despite public statements suggesting otherwise. Instead, the offer relies in part on a revocable trust, which WBD said creates uncertainty about whether the deal could be completed.
By contrast, WBD said the Netflix agreement is fully negotiated and financed, without the need for new equity funding. Netflix has an investment grade balance sheet and a market value of more than $400 billion dollars, which WBD said reduces financial risk for shareholders.
Regulatory and cost concerns
The WBD board also said it does not see a meaningful difference in regulatory risk between the two deals. It noted that Netflix has agreed to pay a record $5.8 billion dollars if regulators block the merger, a move the board said shows confidence in winning approval.
WBD warned that accepting the Paramount Skydance offer could create extra costs for shareholders. These include a termination fee payable to Netflix and higher financing expenses. Together, the board said, these costs could significantly reduce the value of the Paramount proposal.
Paramount Skydance position
Paramount Skydance has promoted its bid as a chance to combine major Hollywood assets and create a larger media group. Supporters of the offer argue that combining Paramount, Skydance and WBD could unlock strong operational synergies.
WBD rejected that view, saying the proposed synergies are highly optimistic and could weaken the creative side of the industry. The board also said the high level of debt required for the Paramount Skydance deal adds further risk.
Netflix response
Netflix welcomed the WBD board decision. Co-chief executives Ted Sarandos and Greg Peters said the merger is the best long term option for WBD shareholders, creators and audiences.
They said Netflix would preserve Warner Bros. core strengths, including theatrical film releases and the HBO brand, while expanding global reach and investment in content. Netflix also stressed that the combined company would continue to face strong competition from other major media and technology companies.
What happens next
WBD shareholders are expected to vote on the Netflix merger after regulatory reviews are completed, a process that could take more than a year. Until then, the company is advising shareholders not to tender their shares to Paramount Skydance.
Earlier, Qazinform News Agency reported that Paramount had made a public tender offer to acquire Warner Bros. Discovery for $30 per share, positioning its all-cash proposal as a faster, more certain, and higher-value alternative to the recently announced Netflix transaction.
