Warner Bros Rejects Paramount's Hostile Takeover Bid

Warner Bros Decides Against Paramount Skydance Offer

The board of directors at Warner Bros Discovery (WBD) has unanimously rejected the latest attempt by Paramount Skydance to acquire the studio, stating that the revised offer of $108.4 billion poses a significant risk to investors. In a letter to shareholders, the board emphasized that Paramount's proposal relies on "an extraordinary amount of debt," which exacerbates the risks associated with completing the transaction.

Warner Bros reaffirmed its commitment to the $82.7 billion offer from Netflix, aimed at securing the film and television studio along with other assets. While some investors, such as Matthew Halbower, CEO of Pentwater Capital Management, criticized WBD's decision, arguing that Paramount's offer is economically "superior," the board explained the huge financial risks involved in potentially finalizing the acquisition deal from Paramount.

Paramount, valued at approximately $14 billion, proposed utilizing $40 billion in equity, personally guaranteed by Oracle co-founder Larry Ellison, alongside $54 billion in debt to finance the acquisition.

The board's letter accompanied a 67-page amended merger request detailing the reasons for rejecting Paramount's offer. It was deemed "inadequate" due to the insufficient value offered and the uncertainty regarding Paramount's ability to complete the deal.

In other news, Warner Bros Discovery shares rose by 0.3% following the announcement, while shares of Paramount experienced a decline of 0.1%.