Warner Bros. Discovery has officially asked its shareholders to decline Paramount’s $108 billion offer to buy the company. They believe the offer is financially risky and less secure than their existing agreement to merge with Netflix.
Warner Bros. Discovery (WBD) informed investors in a three-page letter that they don’t consider Paramount’s offer better than the existing deal with Netflix and recommend rejecting it.
WBD Questions Paramount’s Financing
Warner Bros. Discovery (WBD) is questioning Paramount’s assertion that the Ellison family financially guarantees their bid. While Larry Ellison is a major investor and supports Paramount’s CEO, WBD claims the family hasn’t made a firm, legally binding commitment to back the deal.
The letter states that Paramount’s plan uses a trust which Warner Bros. Discovery considers unclear and full of potential problems, like loopholes and restrictions.
The board expressed concern that this arrangement unnecessarily risks shareholders’ investments and doesn’t guarantee funding will be secured if needed.
Board Calls Offer “Illusory”
Warner Bros. Discovery also pointed out weaknesses in Paramount’s offer, specifically that Paramount has the option to change or cancel it, even altering the price.
The company’s board doesn’t believe the proposal is likely to succeed soon, as it anticipates it will take a year to a year and a half to get the necessary approvals from regulators around the world.
WBD board chair Samuel A. Di Piazza Jr. stated that the offer is too low and would put shareholders at considerable risk and expense. He also noted that the proposal still doesn’t resolve issues the company has repeatedly discussed with the other party.
Netflix Deal Reaffirmed As Superior
In addition to turning down Paramount’s offer, Warner Bros. Discovery reaffirmed its commitment to its deal with Netflix, stating it provides a more secure financial outcome, better funding, and a smoother path through the regulatory process.
Netflix leaders Ted Sarandos and Greg Peters sent a letter to Warner Bros. Discovery shareholders, reiterating their belief in their $82.7 billion offer to acquire the company. Sarandos also stated that Netflix intends to continue releasing Warner Bros. films in theaters and keep HBO known for its high-quality TV shows.
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2025-12-17 18:02