Warner Bros. Discovery fired back at the latest salvo from David Ellison’s Paramount Skydance, saying that more than 93% of its shareholders have rejected Paramount’s “inferior scheme” in favor of the $83 billion sale of WB to Netflix.
WBD was responding to Paramount’s announcement Thursday that it was extending its hostile takeover offer of $30/share in cash to Warner Bros. Discovery shareholders until Feb. 20. Paramount filed to solicit WBD stockholders to vote against the Netflix deal at a special meeting of Warner Bros. Discovery shareholders, expected to take place in April.
In a statement, Warner Bros. Discovery said: “Once again, Paramount continues to make the same offer our Board has repeatedly and unanimously rejected in favor of a superior merger agreement with Netflix. It’s also clear our shareholders agree, with more than 93% also rejecting Paramount’s inferior scheme. We are confident in our ability to achieve regulatory approval for the Netflix merger and look forward to delivering the tremendous and certain value our agreement will provide to Warner Bros. Discovery shareholders.”
WBD’s board has turned down Paramount’s M&A offers eight times.
If Paramount Skydance fails to persuade WBD stockholders who own more than 90% of outstanding shares to support its bid by Feb. 20 — and it seems unlikely Paramount will succeed here, given the WBD board’s firm backing of the Netflix deal — Ellison would be forced to again extend the tender offer deadline, assuming his company opts to continue pursuing the hostile takeover campaign.
What would move the needle in Paramount’s favor: upping the price tag on its acquisition offer for Warner Bros. Discovery in its entirety.
Paramount’s bid is backed by David Ellison’s father, Oracle co-founder and multibillionaire Larry Ellison (who has personally committed $40.4 billion toward the prospective deal), along with partners including RedBird Capital Partners and the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi.
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But according to sources familiar with the thinking of Paramount Skydance and its financial backers, the media company right now is not prepared to go higher than $30/share. In announcing the extension of its tender offer, Paramount Skydance said it was “reaffirming its commitment to a transaction with WBD at a $108.4 billion enterprise value that is significantly greater and far more certain than the purported $82.7 billion enterprise value of the Netflix transaction.”
Netflix on Tuesday (Jan. 20) upgraded its deal to buy Warner Bros. Discovery’s TV and film studios and the HBO Max streaming business by switching to an all-cash offer valued at $27.75/share, replacing its previous cash-and-stock agreement. That was aimed at negating Paramount’s assertion that its offer was superior because it was all-cash.
Netflix and WBD said their deal is on track to close 12-18 months following the signing of their original agreement on Dec. 4, 2025, pending regulatory clearances and WBD shareholder approval. Netflix’s deal for Warner Bros. would close following WBD’s planned Q3 spin-off of Discovery Global, which is set to include cable nets like CNN, TNT, TBS, HGTV and Food Network as well as TNT Sports and Discovery+.
Meanwhile, Paramount sued WBD’s board members earlier this month, seeking to force it to disclose financial details including how it is valuating Discovery Global. According to Paramount’s analysis, shares in Discovery Global would be worthless (although it conceded that Discovery Global would have a theoretical M&A value of $0.50/share). In an SEC filing Tuesday in connection with the amended all-cash agreement with Netflix, Warner Bros. Discovery disclosed details of the Discovery Global entity, including five-year financial projections for CNN and other properties — no court order needed. WBD said the board’s analysis of “selected public companies” on a sum-of-the-parts basis indicated an approximate implied equity value reference range for Discovery Global of $2.41 to $3.77 per share. Furthermore, it said, an analysis of Discovery Global in the context of a potential future acquisition (based on a selected transactions analysis) indicated Discovery Global is worth $4.63 to $6.86 per share.
On Thursday, Paramount claimed that WBD “still has omitted highly material information its shareholders need about Discovery Global” — namely, how much debt WBD will ultimately offload to Discovery Global. WBD said the target amount of net debt for Discovery Global is $17.0 billion as of June 30, 2026, with decreases over time to $16.1 billion as of Dec. 31, 2026. As part of its upgraded deal terms, Netflix agreed to reduce the specified amount of net debt to be borne by Discovery Global by $260 million.
If WBD allocates any portion of the $17 billion debt amount pegged for Discovery Global (as of June 30) back to the WBD streaming and studios business, “that will reduce the per-share consideration dollar-for-dollar that WBD shareholders will receive” under the Netflix offer, Paramount noted.
“Despite the fact that the capital structure of Discovery Global will directly determine the actual amount WBD shareholders receive in the Netflix transaction, and WBD will be required to disclose such information as well as full financial information about Discovery Global at the time of the separation, WBD plans to solicit shareholder approval for the Netflix transaction without this information,” Paramount Skydance said.
According to Netflix, under its latest agreement with WBD, it would assume $10.7 billion in Warner Bros. net debt. The WB acquisition would be funded by $20 billion in cash on hand and $52 billion in debt financing. For the all-cash $27.75/share deal, Netflix has secured $42.2 billion in debt financing from Wells Fargo, BNP and HSBC.
From Variety US