Warner Bros. Discovery’s board of directors has unanimously rejected the $108 billion hostile takeover bid from David Ellison’s Paramount Skydance. The board described the offer as illusory and accused Paramount of misleading shareholders about its financing.
The board stated its intention to honor its initial agreement to sell to Netflix. In a letter to shareholders, the board wrote that Paramount has consistently misled Warner Bros. Discovery shareholders by claiming its proposed transaction had a full financial backstop from the Ellison family. The board clarified that such a backstop does not exist and never has.
Warner Bros. Discovery’s board declared Paramount’s tender offer inferior to the Netflix merger. It highlighted that Netflix’s binding offer of $27.75 per share for Warner Bros.’ Hollywood studios and streaming business comes with enforceable commitments, requires no equity financing, and has robust debt commitments already in place.
Netflix welcomed the board’s decision. Netflix co-CEO Ted Sarandos stated that the Warner Bros. Discovery board reinforced the superiority of Netflix’s merger agreement and confirmed that their acquisition is in the best interests of stockholders.
According to reports, Paramount and David Ellison’s backers, including his father, tech billionaire Larry Ellison, will review this rejection and determine whether to raise their offer.