Warner Bros. Discovery rejects Paramount's amended hostile bid

Warner Bros. Discovery recommended shareholders reject Paramount’s amended $77.9 billion all-cash bid and said its existing deal with Netflix is stronger.

Warner Bros. Discovery told shareholders to reject Paramount’s amended $77.9 billion all-cash takeover offer, saying the revised proposal is not superior to the company’s existing agreement with Netflix. The board said Paramount’s bid raised questions about financing and added risks, and it reaffirmed the company’s commitment to the Netflix transaction. Paramount had recently increased its offer and included a large personal financing guarantee, but Warner’s board again judged the offer inadequate. The dispute follows earlier rejections and comes as Warner prepares a split that would place its cable networks into a separate public company. Key facts: - Warner’s board unanimously concluded Paramount’s amended offer “remains inadequate” and recommended shareholders reject the tender. - Paramount’s revised bid included a personal guarantee from Larry Ellison for $40.4 billion of equity financing and an increased breakup fee that matched Netflix’s $5.8 billion figure, as reported. - Warner said switching to Paramount would trigger billions in additional costs, including a reported $2.8 billion termination fee payable to Netflix and a $1.5 billion fee tied to a failed debt exchange. - The company described the Paramount proposal as effectively a leveraged buyout that would require a very large amount of debt financing and carry additional closing risk. - Netflix said it welcomed Warner’s continued commitment to their agreement and is engaging with competition authorities in the U.S. and Europe. Summary: Warner’s board has publicly rejected Paramount’s amended offer and reiterated support for the existing Netflix agreement, citing financial and closing risks with Paramount’s proposal. Shareholders have a deadline of Jan. 21 to respond to Paramount’s tender offer, and any final transaction by either suitor would still require regulatory approvals.