The board of Warner Bros. Discovery on Wednesday said it was recommending that shareholders reject the hostile takeover bid from Paramount Skydance and its controlling shareholders, the Ellison family.
The company’s board said in a statement that it determined that the Paramount Skydance offer “is not in the best interests of WBD and its shareholders.”
The board’s recommendation to shareholders effectively means Paramount’s current offer is dead.
Paramount could return with a higher offer, of course. But in a statement later Wednesday, Paramount said it was not raising its offer yet, merely affirming “its commitment” to the deal that the Warner Bros. board had rejected.
“Our proposal clearly offers WBD shareholders superior value and certainty, a clear path to close, and does not leave them with a heavily indebted sub-scale linear business,” said Paramount CEO David Ellison. “I have been encouraged by the feedback we have received from WBD shareholders who clearly understand the benefits of our offer.”
“This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of their six previous proposals,” Warner Bros. Discovery Chair Samuel Di Piazza said.
The company said it was instead sticking with its initially announced deal to sell its studio, HBO and HBO Max to Netflix. “The terms of the Netflix merger are superior,” Warner Bros. Discovery said in a letter to shareholders.
Paramount launched a hostile takeover bid valued at more than $108 billion for all of Warner Bros. Discovery just days after the media giant announced plans to sell some of its prized assets to Netflix.
Ellison, Paramount’s CEO, had argued that it could secure faster approval for a deal than any transaction with Netflix.
Ellison’s multibillionaire father Larry Ellison is the chairman of the tech giant Oracle, and he pledged to help backstop Paramount’s Warner bid if needed. Larry Ellison is also close to the Trump administration.
But in recent days, President Donald Trump has criticized both Paramount and the Ellisons.
On Tuesday, Trump said, “For those people that think I am close with the new owners of CBS, please understand that 60 Minutes has treated me far worse since the so-called ‘takeover’ than they have ever treated me before.”
“If they are friends, I’d hate to see my enemies!” Trump added on Truth Social.
Netflix said it welcomed Warner Bros.’ rejection of Paramount.
“The Warner Bros. Discovery Board reinforced that Netflix’s merger agreement is superior and that our acquisition is in the best interest of stockholders,” Netflix co-CEO Ted Sarandos said.
“This was a competitive process that delivered the best outcome for consumers, creators, stockholders, and the broader entertainment industry,” he continued.
On CNBC, Netflix co-CEO Greg Peters said, “We feel those facts really support the approval of the deal.”
He said that Netflix was “confident regulators will ultimately see this as pro-consumer, pro-creator, pro-worker” and good for competition.
On Tuesday, Jared Kushner’s private equity firm withdrew from a group of funds that had said they would support the Paramount bid for Warner Bros. Discovery with funding.
In securities filings, Warner Bros. Discovery said it also had additional bidders. Without naming the bidder, it said another firm offered to buy its cable networks for $25 billion in cash and a 20% stake in Warner Bros. Discovery’s Streaming & Studios unit, which Netflix ultimately agreed to buy outright.
As of 12:30 p.m. ET, Warner Bros. Discovery shares were down 4.5%. Netflix shares were slightly higher and Paramount shares declined about 1.5%.
