Warner Bros Discovery has formally rejected Paramount Skydance’s revised $108.4 billion takeover proposal, calling it a high risk leveraged buyout and reaffirming its support for Netflix’s competing offer.
In a letter to shareholders issued on Wednesday, Warner Bros’ board said the Paramount bid relies on an “extraordinary amount of debt financing,” which significantly increases execution and closing risks. The board unanimously advised investors to reject the offer and confirmed its continued backing of Netflix’s $82.7 billion deal for the studio and select assets.
Paramount and Netflix have been locked in a high profile battle to acquire Warner Bros, whose portfolio includes some of the world’s most valuable entertainment franchises such as Harry Potter, Game of Thrones, Friends, the DC Comics universe, and a vast library of classic films.
Paramount’s proposal involves $40 billion in equity, personally guaranteed by Oracle co-founder Larry Ellison, along with $54 billion in debt financing. Warner Bros said this structure would further pressure Paramount’s balance sheet, weaken its already junk-rated credit profile, and strain cash flows, raising concerns over deal certainty.
By contrast, Netflix’s offer of $27.75 per share in a mix of cash and stock is backed by the streaming giant’s $400 billion market capitalisation and investment grade credit rating, the board noted. Warner Bros said this makes Netflix’s bid materially stronger and more reliable.
The rejection comes despite Paramount revising its offer on December 22 to address earlier concerns, including the absence of a personal guarantee from Ellison, who is Paramount’s controlling shareholder and father of CEO David Ellison.
Netflix co-CEOs Ted Sarandos and Greg Peters welcomed the decision, saying it reflects Warner Bros’ recognition of Netflix’s proposal as the one that delivers the greatest long-term value to shareholders, creators, and consumers. Paramount declined to comment.
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