David Ellison, the CEO of Paramount Skydance who has launched a hostile takeover bid for Warner Bros. Discovery, is urging WBD shareholders to tender their shares and “register their view with the WBD board of directors that they prefer the superior Paramount transaction,” the company said.
Paramount sent a letter from Ellison Wednesday addressed to WBD shareholders (read the full text below). According to Paramount, the letter “clearly sets out why Paramount’s $30.00 per share all-cash offer to acquire all of WBD is superior to WBD’s transaction with Netflix.”
“We funded, founded and then merged Skydance with Paramount and know the sacrifices and investment it takes to capitalize and grow a media business,” Ellison wrote in the letter. “I am passionate and dedicated to this pursuit, committed to putting my own money in, and that is why I am writing to you today.”
SEE ALSO: How Netflix’s WB Megadeal Stunned Hollywood — and Sparked a Fight From David Ellison
On Monday, Ellison’s Paramount Skydance launched a direct-to-shareholders hostile takeover effort for WBD, with its most recent bid carrying an enterprise value of $108.4 billion. That came after Netflix and Warner Bros. Discovery on Dec. 5 announced an $83.7 billion agreement, under which the streamer would buy WB’s studios, HBO, HBO Max and games divisions.
Warner Bros. Discovery said Monday that its board will “carefully” review the Paramount offer and issue a recommendation within 10 business days (as required by law). WBD’s review of the Paramount bid is a formality, as Paramount already had submitted the $30/share bid on Dec. 4 to the board. The next step would be a higher per-share offer from Paramount Skydance in the coming days.
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Here is the full text of Ellison’s letter:
Dear Warner Bros. Discovery Shareholder:
Paramount began pursuing Warner Bros. Discovery (“WBD”) because we, along with our partner RedBird Capital, believe we are the best stewards not only to build long-term value for the asset but also delight audiences and help cultivate a more vibrant creative community.
We funded, founded and then merged Skydance with Paramount and know the sacrifices and investment it takes to capitalize and grow a media business. I am passionate and dedicated to this pursuit, committed to putting my own money in, and that is why I am writing to you today.
Over the past 12 weeks, Paramount presented six proposals to the WBD Board of Directors and management to acquire all of WBD. On Monday, we launched a $30.00 per share all-cash tender offer to present our superior transaction to you directly.
Our tender offer documents filed with the Securities and Exchange Commission include the
complete bid package we submitted to the WBD Board of Directors on December 4. We want
you to see firsthand what Paramount proposed and what we, along with our equity and debt
financing partners, were prepared to execute on that very day.
Our public offer – identical to the terms we presented to WBD privately – delivers superior
value and a faster, more certain path to completion than the transaction announced with
Netflix. IT IS NOT TOO LATE TO REALIZE THE BENEFITS OF PARAMOUNT’S PROPOSAL IF
YOU CHOOSE TO ACT NOW AND TENDER YOUR SHARES.
Our offer is financially superior to Netflix’s transaction, which provides WBD shareholders
with lower value, less cash and significantly less certainty. On its face, Netflix is offering
WBD shareholders $23.25 per share in cash, $4.50 in stock and a share in WBD’s Global
Networks spin-off. In reality, however, the total value is materially lower than advertised:
1) Netflix’s cash component is ~$18 billion lower than Paramount’s in the
aggregate (~$7 per share).
2) Netflix’s stock price closed at $96.71 on Tuesday and, as of this writing, is trading
at $93.81, more than $4 below the low-end of the collar on its stock
consideration. This reduces the value of Netflix’s offer.
3) During the pendency of a regulatory review process that could take two years or
more, WBD shareholders will be exposed to Netflix stock’s downside risk, including
technology sector volatility, a lofty ~25x forward EBITDA multiple and the
uncertainty of seven future quarterly earnings results. For reference, Netflix has
lost approximately one quarter of its market capitalization ($110+ billion)
since its last quarterly earnings report and amid its pursuit of WBD.
4) Buried in an 8-K filing on Friday was a mechanism providing a dollar-for-dollar
reduction in the purchase price if more debt gets allocated to Streaming &
Studios because of an unspecified cap on Global Networks. While the limit is
undisclosed, every $1 billion above it could represent a reduction of ~$0.40 / share.
5) Netflix’s transaction leaves WBD shareholders with 100% of the risk of the
Global Networks standalone plan. As outlined on our December 8 investor call,
we believe Global Networks is worth ~$1 / share which would mean a total
headline value to WBD shareholders in the Netflix deal of $28.75 – below our
$30.00 all-cash offer. This is before any risk adjustments described above and any
time-value-of-money discounting of Netflix’s offer to account for the substantially
longer timeline to close (~$1.25 / share for every six months).1 In addition, the
Netflix transaction would further exacerbate the decline of Global Networks.
1 Based on 4.5x consensus next twelve months EBITDA (including allocation of stock-based compensation and
corporate overhead) of $3.9 billion as of Q3’26 (expected separation closing date WBD announced as part of Netflix
transaction) and net debt of $15 billion. 4.5x multiple is based on equity research analysts who perform a sum-ofthe-
parts analysis of WBD and is also within range of where research analysts expect Versant to trade, despite the
facts that Versant will have materially lower net leverage (~1.25x vs. Global Networks >3x), strong news (e.g.,
CNBC and MS Now), live sports (e.g., Golf Channel, English Premier League, the Olympics, others) and highgrowth
digital assets (e.g., GolfNow, Fandango). WBD Linear has also historically struggled to achieve analyst
consensus expectations.
Paramount’s $30.00 All-Cash Offer for All of WBD Delivers Greater Value Than Netflix
Paramount has lined up all necessary financing to deliver its $30.00 per share all-cash
offer to WBD shareholders.
As presented to the WBD Board, Paramount’s offer is not subject to any financing conditions
and will be financed by $41 billion of new equity backstopped by the Ellison family and
RedBird Capital and $54 billion of debt commitments from Bank of America, Citi and Apollo.
On December 3, WBD told us they wanted an Ellison family backstop on our equity financing.
We delivered it to them less than 24 hours later. Our December 4 offer included an equity
commitment from the Ellison family trust, which contains over $250 billion of assets (more
than 6x the equity funding commitment) including approximately 1.16 billion Oracle shares
and tens of billions of dollars in other assets. This information is publicly available; and,
notably, the trust has been a counterparty in other completed public company transactions
including for Twitter, which involved one of WBD’s advisors. In fact, the equity commitment
papers submitted to WBD were identical in all material respects to commitments that the
advisors to WBD had agreed to in other large transactions such as Twitter and Electronic
Arts.
To suggest that we are not “good for the money” (or might commit fraud to try to
escape our obligations), as certain reports have speculated, is absurd. That absurdity
is underscored by the fact that WBD and its advisors never picked up the phone or
typed out a responsive text or email to raise any question or concern or to seek any
clarification about either the trust or our equity commitment papers.
Our debt commitments are not conditioned upon Paramount’s financial condition nor is there
any “material adverse change” condition tied to Paramount. The conditions dovetail with our
proposed merger agreement, which provided maximum certainty to WBD and its
shareholders.
Paramount’s offer not only delivers superior value and certainty, but also a much
shorter and more certain path to completion. To underscore our confidence, we have
already filed for Hart-Scott-Rodino (HSR) approval in the United States and announced the
case to the European Commission, opening the path to pre-notification discussions. We look
forward to working collaboratively with the relevant authorities to work through the review
process and deliver this transaction to you and our other stakeholders.
Netflix Faces Severe Regulatory Uncertainty & Closing Risk – Paramount Does Not
Paramount Has Air Tight Financing to Deliver on its Offer to You
WBD’s transaction with Netflix, on the other hand, appears to be in for a long and
bumpy ride as it navigates the global regulatory review process. Netflix is the #1
streaming business globally by subscriber count and HBO Max is #4. Combining these two
yields an overwhelming market share of ~43% – more than 2x the #2. This is in addition to
the other serious competition concerns raised, including from vertically integrating WBD’s
film and TV production studios into Netflix, which will give Netflix greater leverage over
theatrical exhibitors and creative talent alike. Notably, and as an indicator of its global
dominance, Netflix’s current equity market capitalization dwarfs that of all other major
media companies and theatrical exhibitors combined (even after the above-mentioned $110+
billion loss in value):
Netflix’s Equity Market Capitalization vs. Broader Media Landscape (as of 12/09/25):
(1) Based on unaffected price as of September 10, 2025 (prior to WSJ leak).
Outside the United States, Netflix’s regulatory path is particularly challenged in Europe where
its dominance is far more entrenched. Our analysis was conducted by the former deputies
of merger enforcements for the European Commission and the U.K.’s Competition and
Markets Authority. Netflix is by far the dominant streaming service in Europe, accounting
for 51% of the total European OTT subscription revenue in 2024, with Disney a distant second
at only 10%. The acquisition of WBD’s Streaming & Studios business is a blatant
attempt to eliminate one of Netflix’s only viable international competitors in HBO Max.
Market share analysis aside, Netflix also needs to satisfy Europe’s new landmark Digital
Netflix’s equity value is nearly $40 billion
greater than that of all other major media
companies and theatrical exhibitors
combined (even after its more than $110
billion loss in market value)
Services Act and Digital Markets Act created for a situation precisely like this – protecting
consumers from Big Tech overreach.
The argument being advanced publicly by Netflix and its proxies states that regulators should
ignore the SVOD market and instead utilize a gerrymandered market definition that includes
services like YouTube, TikTok, Instagram, and Facebook. Netflix’s claim boils down to trying
to mask its dominance in SVOD by grouping together all internet-enabled video, media, social
media, or otherwise. No regulator has ever accepted such a broad approach to market
definition, and to do so would require regulators to give up on merger enforcement in
media and social media alike.
It is noteworthy that, unlike Paramount’s willingness to agree to remedies up to a “material
adverse effect” on the combined company, Netflix’s regulatory remedy commitments expressly
state no remedy whatsoever can be imposed on Netflix’s business. Netflix also has a longer
timeline — an “outside date” of 21 months. Paramount backed up its commitments with a $5
billion regulatory reverse termination fee. Netflix’s incremental $800 million over that
amount does not close the gap between the differences in regulatory complexity and
challenges.
For the avoidance of doubt, our $6 billion synergy estimate does not rely on cuts to
content budgets at our studios and we intend to continue running both separately
post-close. Our synergy analysis relies on efficiencies elsewhere across the combined
organization, including technology, linear networks optimization, and real estate
rationalization. Having experienced what it is like to act in and produce films first-hand, I
have profound respect for creative talent. This is why we are fully pro-Hollywood, dedicated to
supporting a growing theatrical slate of over 30 films per year and investing in the people and
storytelling that drive the industry forward.
Over the last few days, we have heard from WBD shareholders and other stakeholders all
asking the same question—what happened? Frankly, we are asking the same question.
The WBD sale “process” was unusual in that, over the entire period, its advisors never
delivered to Paramount a single markup of any of our transaction documents—not our
merger agreement nor our equity commitment documents. In addition, there was not a single
“real time” negotiating session with us.
When Paramount submitted its fifth proposal on December 1, a proposal accompanied by full
transaction documents that we stated we were prepared to sign, we offered $26.50 / share in
cash.
WBD’s Murky Sale Process
On December 3, WBD provided feedback on Paramount’s proposal and communicated that
the WBD Board would be “meeting periodically over the course of this week” but they never
asked for a re-bid (which is strange if your goal is to maximize value for shareholders). On
that call, our advisors asked whether the WBD Board continued to prioritize cash
consideration as they had consistently communicated to us. WBD’s lead advisor’s response:
“Isn’t cash always king?” One must ask: was that same message being delivered to Netflix?
Despite the opaque process, Paramount proactively submitted a revised offer with full
transaction documentation in under 24 hours (at 11:00 am ET on December 4) and stated
that Paramount and our funding sources were ready to sign it immediately. This revised offer
addressed all of the scarce feedback that Paramount received.
Yet on that final pivotal day when WBD’s fate hung in the balance, we received not a single
call, text or email to clarify anything about Paramount’s $30 per share all cash offer. Instead,
and while in possession of our superior and fully committed bid and documents that entire
day, the WBD Board and its advisors sprinted toward a deal with Netflix (even ignoring
two separate texts from myself and Paramount’s advisors stating that we had never
said “best and final”).
Our proposal represents a compelling opportunity for WBD shareholders. We are committed
to seeing this transaction through.
Since Monday, we have had the opportunity to speak with a number of WBD shareholders
who have expressed confusion and disappointment at the process that WBD conducted, which
appears to have prioritized a deal with Netflix over shareholder value maximization. Multiple
equity research notes published over the last 48 hours have also agreed that our offer is
superior and that the Global Networks spin-off does not close the gap to $30.00 in cash.
From here, you can expect WBD to respond to our tender offer within 10 business days via a
14D-9 filing with the SEC. Our tender offer will remain open for at least 20 business days. The
closing of the tender offer is conditioned upon, among other things, a majority of WBD shares
tendering in our favor, receipt of regulatory approvals, termination of the Netflix merger
agreement and entry into a definitive merger agreement with us.
WE URGE YOU TO REGISTER YOUR VIEW WITH THE WBD BOARD THAT YOU DEEM PARAMOUNT’S OFFER TO BE SUPERIOR BY TENDERING YOUR SHARES TODAY.
Sincerely,
David Ellison
Chairman and Chief Executive Officer
Paramount Skydance Corporation
The below frequently asked questions provide a summary of relevant information for shareholders looking to understand more about Paramount’s tender offer.
1) Why should I tender my shares?
Paramount has launched an all-cash tender offer to acquire all outstanding shares of
Warner Bros. Discovery (“WBD”) for $30.00 per share. We believe our offer
provides superior value through a simple all-cash structure and a quicker, clearer
path to completion than the transaction that WBD agreed to with Netflix. It is not
too late to get the benefits of Paramount’s offer if you act now. By tendering your
shares, you are registering your view with the WBD Board of Directors that
Paramount’s offer is superior to the Netflix transaction.
2) How do I tender my shares?
If you are the record holder of your shares:
o Mail the following to Equiniti Trust Company, LLC, which is acting as
depositary in the offer, at one of the addresses specified in the Letter of
Transmittal:
§ the certificates representing your shares;
§ a completed Letter of Transmittal; and
§ any other documents required by the Letter of Transmittal.
o The mailing must occur by 5:00 p.m., New York City time, on January 8, 2026
(unless further extended by Paramount).
If you hold your shares in street name (i.e., through a broker, dealer, commercial
bank, trust company or other nominee (a “Broker”)):
o Request that your Broker effect the transaction for you.
o Each such Broker will detail the process in its communication to you about
the offer.
Contact Okapi Partners LLC (“Okapi”), our information agent, at the number or
email set forth below for assistance with tendering your shares or with any other
specific questions about the offer.
For detailed instructions on procedures for tendering your shares, please see the
section of the Offer to Purchase entitled “The Offer–Section 3–Procedure for
Tendering Shares,” which can be accessed here. A form of the Letter of Transmittal
is filed as an exhibit to the Schedule TO-T filed by Paramount with the SEC, which
form can be accessed here.
3) When should I tender my shares?
Tender Offer Process FAQs
The sooner you tender your shares the better. The tender offer is scheduled to
expire at 5:00 p.m., New York City time, on January 8, 2026, which date may be
extended by Paramount.
4) Can I withdraw my tender if I change my mind?
Yes. You may withdraw your previously tendered shares at any time before the
expiration date. Generally, following the expiration, all tendered shares are
irrevocable. However, if Paramount has not accepted the shares tendered for
payment pursuant to the offer by February 9, 2026 (the first business day after the
60th day following commencement of the tender offer), you may also withdraw
your previously tendered shares after such date (i.e., on or after February 10, 2026).
For additional information on the limitations to and procedures for withdrawing
your shares, please see the section of the Offer to Purchase entitled “The Offer–
Section 4–Withdrawal Rights,” which can be accessed here.
5) Who should I call with questions about tendering my shares?
You may direct questions and requests for assistance to Okapi. Banks and brokerage
firms can call (212) 297-0720, and shareholders and all others can call toll-free
(844) 343-2621. They can also be reached via email at info@okapipartners.com.
1) What is the Lawrence J. Ellison Revocable Trust u/a/d 1/22/88 (the “Trust”)?
Larry Ellison’s Trust holds substantially all of Mr. Ellison’s assets, including
1.158 billion shares of Oracle Corporation (approximate value on 12/9/25 of
$257 billion).
The Trust was formed in 1988 and, along with its many wholly owned
subsidiaries, has engaged in many thousands of transactions since that time,
with no intention to change the way it does business.
The Trust has participated in multiple large-scale transactions and has been
vetted by public companies and most of the largest banks in the US.
By way of example, the Trust backstopped a multi-billion-dollar equity
investment to fund Skydance’s acquisition of Paramount and funded a
$1 billion investment in Twitter’s take-private (which was advised by
Wachtell, Lipton, Rosen & Katz, WBD’s legal counsel).
The Trust has direct banking relationships with each of the four largest
US banks and six of the top ten US banks (as measured by total assets).
Any concern that the Trust would take any steps to avoid its obligations (i.e.,
commit fraud) is meritless and, if such a concern is ever directly raised with the
Trust, we will happily address it in the paperwork.
2) Did the Trust submit an equity backstop in support of Paramount’s bid for WBD?
Yes, the Trust submitted an equity backstop for $40.4 billion dollars.
Other Questions We Have Heard From WBD Shareholders
The paperwork submitted in the bid for WBD represents a completely
customary and enforceable equity financing commitment and is identical in all
material respects to the equity financing terms in the Paramount/Skydance
transaction and other large leveraged buyouts (e.g., Twitter).
However, to the extent that WBD raises legitimate concerns about the terms of
the equity financing, the Trust will happily address such concerns in the
transaction documentation.
3) Should Global Networks trade in line with Versant (Comcast’s pending spinoff)?
Versant is not yet a public company. Regular way trading will begin on January 5,
At the moment, equity research analysts estimate that it will trade at ~4-
5x NTM EBITDA.
We believe Global Networks is worth ~$1 / share, which is based on a 4.5x EV /
next twelve months EBITDA for the business as of Q3’26 (when WBD expects to
close its separation).
While we believe Versant is a good comp for Global Networks, Global Networks
should trade at a material discount to Versant given:
Versant will be significantly less leveraged (~1.25x net leverage for
Versant vs. >3x for Global Networks)
Versant’s live news and sports portfolio, which we believe is the highest
value category in Pay TV, far outpaces Global Networks:
o Live news and sports account for ~62% of Versant’s audience vs
~20% for WBD.
o Compared to Global Networks’ CNN and Turner networks (which
essentially lost all sports rights following the loss of NBA rights),
Versant owns a robust portfolio of some of the most valuable live
news and sports channels including CNBC, MS Now (formerly
MSNBC), the Golf Channel and USA. Its live sports rights are
contracted until ~2028-2036 and include the English Premier
League, the Olympics, the WNBA, WWE, the PGA Tour and
NASCAR, among others.
A large portion of Versant’s business is in digital, higher growth assets
(e.g., GolfNow, Rotten Tomatoes and Fandango), whereas Global
Networks’ only major digital asset is Bleacher Report.
Versant is much less weighted toward lower value lifestyle and reality
content that Global Networks specializes in (e.g., HGTV, Food Network,
TLC, Discovery Channels).
4) What is included in the $6 billion+ run-rate cost synergy target?
We are very focused on maintaining the creative engines of the combined
company,
Our synergies estimate is driven by duplicative operations across all aspects of
the business – specifically, back office, finance, corporate, legal, technology,
infrastructure and real estate.
Our content savings estimate reflects only a <10% reduction of combined spend,
none of which is derived from film/TV studios. As we have mentioned several
times, we do not plan to reduce theatrical output – we intend to grow our slate
to over 30 films each year. Instead, we expect to make smarter decisions about
licensing across linear networks and streaming.
On a combined basis, we still expect to lead the industry in content spending
(~$35 billion annually vs. Netflix’s publicly announced expectation of ~$18
billion for 2025).
It is important to note that context matters. Because it is only buying part of
WBD, Netflix’s $2-3 billion announced synergy target in its transaction does not
include any savings from Global Networks – WBD’s largest segment by SG&A in
2024 ($2.8 billion, vs. $2.4 billion in Studios and $2.2 billion in Streaming). The
suggestion that Paramount’s plan relies on deeper job cuts than Netflix’s is
not supported by any facts.
WBD shareholders and other interested parties can find additional information about
Paramount’s superior offer at http://www.StrongerHollywood.com.
From Variety US