The Ellisons came promising boatloads of cash. They told Warner Bros. Discovery chief David Zaslav they would give him a pay package worth hundreds of millions of dollars. Over a four-month stretch, David Ellison pressed his case aggressively that Paramount Skydance had the best offer on the table.
None of it — so far — has been enough to sway the Warner Bros. Discovery board.
On Wednesday, the board of Warner Bros. Discovery officially rejected Paramount Skydance’s $30-per share unsolicited takeover offer for the whole company, saying it’s sticking with the “superior” deal offer with Netflix. As part of the WBD response, the company disclosed a timeline of the interactions between Warner Bros. Discovery and Paramount, which grew contentious over the several weeks that Paramount’s David Ellison was driving aggressively to land a multibillion-dollar deal for WBD in its entirety.
The WBD filing presents a chronology of events and meetings that occurred, leading up to WBD’s Dec. 5 announcement of its deal to sell Warner Bros. studios and HBO Max to Netflix, following by David Ellison’s hostile takeover bid and the WBD board’s official rejection of the $30/share bid on Dec. 17.
Per the filing with the SEC, WBD CEO David Zaslav told the company’s board after David Ellison’s initial $19/share offer in September that the Ellisons — David and his father, billionaire Larry Ellison — had “indicated to him that, if a transaction between PSKY and WBD were to occur, Mr. Zaslav would receive a compensation package worth several hundred million dollars.” According to the WBD filing, Zaslav advised the Warner Bros. Discovery board that “he informed the Ellisons that it would be inappropriate to discuss any such arrangements at that time.”
Note that Zaslav stands to reap a windfall of hundreds of millions from his WBD stock holdings, whether Warner Bros. sells to Netflix or Paramount — and he’s projected to become a billionaire if either deal goes through.
For Paramount’s hostile bid to prevail over the Netflix agreement, both the board of directors of WBD and WBD stockholders would be required to approve it — unless Paramount receives at least 90% of the outstanding shares of WBD common stock in favor of the proposal.
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WBD also noted in the filing that Zaslav is “subject to a non-competition covenant and a non-solicitation of customers and employees covenant that are each applicable during the period of his employment and for a period of 24 months thereafter, unless Mr. Zaslav’s employment is terminated without ‘cause’ or by Mr. Zaslav for ‘good reason,’ in which case the restricted period would be reduced to 12 months following such qualifying termination.”
According to WBD, Ellison made Paramount’s first official interest in acquiring the company in a Sept. 14 meeting with Zaslav. That came after a WSJ report Sept. 11 that Paramount was prepping a bid for WBD, which prompted the Warner Bros. Discovery share price to spike.
At that first meeting, Ellison proposed to combine WBD and Paramount Skydance in a transaction in which WBD stockholders would receive a 60%-40% cash-stock mix, comprised of $11.40 in cash and 0.404 of a share of PSKY Class B common stock for each outstanding share of WBD common stock. The offer was subsequently delivered in writing, with an implied a value of approximately $19.00 per share of WBD common stock.
That initial proposal “suggested that Mr. Zaslav could be the Chairman of the combined company’s board and that PSKY ‘would also want other WBD directors to join the combined company’s Board.’”
On Sept. 15, the WBD board met to discuss the “potential risks and benefits” of the Paramount proposal. “The WBD Board noted that the PSKY September 14 Proposal significantly undervalued WBD (taking into account, in particular, that PSKY’s share price was inflated in value relative to its recent unaffected price prior to rumors of a potential transaction), that the proposal lacked details or commitments regarding equity financing, and that the stock consideration offered by PSKY consisted of non-voting Class B common stock of PSKY, ensuring that the Ellison family would retain voting control of the combined entity despite owning a minority of the economic interests in the combined company,” per the filing.
On Sept. 22, Zaslav and Samuel Di Piazza Jr., chair of the WBD board, sent a letter to Ellison rejecting the Paramount proposal — the first of what would be six more rejections. Later that day, Ellison called Zaslav to request that Zaslav meet with his father, Larry Ellison, to discuss the Paramount’s interest in acquiring WBD. Mr. Zaslav agreed.
On Sept. 24, Zaslav, John Malone, chair emeritus of the WBD board and a major shareholder, and Larry Ellison had a videoconference meeting to discuss the Paramount initial proposal. At that meeting, Zaslav “reiterated the reasons for the WBD Board’s decision that were conveyed in WBD’s September 22, 2025, letter to Mr. D. Ellison and the WBD Board’s commitment to the separation plan as a superior path to value creation.”
The Ellisons persisted. Paramount Skydance submitted bids of $22/share on Sept. 30; $23.50/share on Oct. 13; $25.50/share on Nov. 20; an all-cash bid of $26.50/share on Dec. 1; and the $30/share offer on Dec. 4. According to Paramount, Ellison sent texts to Zaslav on Dec. 4 about that last offer — including one that read “It would be the honor of a lifetime to be your partner and to be the owner of these iconic assets” — but never heard back.
There were questions and concerns raised by WBD’s side about foreign investors backing Paramount’s bid. On Nov. 18, Variety reported that Paramount was “forming an investment consortium with the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi to submit a bid for Warner Bros. Discovery.” Paramount Skydance denied that — saying Variety‘s report was “categorically inaccurate.” That same day, according to WBD’s SEC filing, a senior member of the Centerview team representing Paramount Skydance spoke with a senior member of the Allen & Co. team representing WBD. “During the call, the senior member of the Centerview team representing PSKY denied the publicly reported rumor that PSKY’s forthcoming proposal to acquire WBD would include a consortium of coinvestors and stated that PSKY would make a ‘clean bid for the whole thing,’” according to the WBD filing.
However, less than two weeks later, the three Arab wealth funds were part of Paramount’s next offer.
Paramount’s Dec. 1 bid disclosed, for the first time, a consortium of seven investors that would commit an aggregate amount of $37.2 billion: the Lawrence J. Ellison Revocable Trust ($11.8 billion), the Public Investment Fund of Saudi Arabia ($10 billion), L’imad Holding Company of Abu Dhabi ($7 billion), the Qatar Investment Authority ($7 billion), Tencent ($1 billion), RedBird ($300 million) and Affinity Partners ($200 million). Affinity is the investment firm headed by Jared Kushner, President Trump’s son-in-law.
WBD said in its filing: “Although PSKY has suggested that any syndication would not trigger review by CFIUS” — the Committee on Foreign Investment in the United States, which is tasked with oversight and investigation of foreign investment in U.S. companies — “it is unclear whether regulatory filings and clearances under foreign investment or media merger laws of non-U.S. jurisdictions would be required. As noted, the President of the United States and CFIUS have broad authorities to review foreign investments subject to CFIUS jurisdiction, and the President’s national security findings in such a context are not subject to judicial review.”
Lawyers for WBD expressed the board’s concerns to Paramount about “the regulatory implications of including Tencent and Middle Eastern sovereign wealth funds in PSKY’s equity financing structure,” per the filing. On Dec. 3, Zaslav had a phone conversation with David Ellison, in which the WBD CEO said Paramount’s Dec. 1 bid was not the highest value proposal received by WBD and that “PSKY’s proposed equity financing terms raised legal and regulatory complexities that would be challenging for the WBD Board to accept.”
On Dec. 4, a few hours before the WBD board’s scheduled meeting, Paramount sent a revised offer for $30 per share in cash. That proposal modified the equity financing structure to provide a $40.4 billion backstop from the Larry Ellison revocable trust, but “continued to include significant deficiencies that had been identified by the WBD Board throughout the process,” according to WBD. Per Warner Bros. Discovery’s account, that included “the lack of any actual commitments or backstop from any member of the Ellison family, a dependency on an opaque Revocable Trust, the creditworthiness of which was not certain and subject to change, deficiencies in the Revocable Trust’s obligations under the proposed equity financing documents, including a monetary damages cap of $2.8 billion on the Revocable Trust’s liability, including in the event of a willful breach, and failure of any member of the Ellison family to make any commitments to provide regulatory cooperation that would be required to consummate the transaction.”
With Paramount’s Dec. 4 proposal, there also “was continued regulatory uncertainty related to PSKY’s expected equity syndication,” as well as “the continued absence of necessary flexibility for WBD to manage its debt capital structure and execute essential refinancing activities during the potentially lengthy period between signing and closing, which, among other adverse consequences, would require WBD to pay a financing cost of approximately $1.5 billion to certain note holders if the contemplated debt exchange offer was not completed by December 30, 2026, and the restriction on WBD’s ability to refinance its $15.4 billion bridge loan.”
“While PSKY stated in its cover letter that it was prepared to sign ‘immediately’, the transaction documents included with the PSKY December 4 Proposal would require substantial additional negotiation on key issues that PSKY had declined to address despite multiple rounds of specific feedback from the WBD Board and WBD’s advisors, and were also incomplete in other respects, with footnotes and bracketed provisions,” according to the WBD filing.
In an attempt to address the board’s concerns, Paramount said in an SEC filing last week that the three Arab wealth funds and Kushner’s Affinity “agreed to forgo any governance rights — including board representation — associated with their non-voting equity investments.” In addition, Chinese internet company Tencent, which had previously committed $1 billion to the Paramount Skydance bid, dropped out of the bid. (On Dec. 16, Kushner’s Affinity said it would no longer part of the Paramount bid.) Those assurances obviously did not tip the balance in favor of the Paramount proposal in the eyes of the WBD board.
Netflix had first registered its interest in buying the WBD streaming studios business on Oct. 16, when Netflix co-CEO Ted Sarandos called Zaslav to discuss a potential deal, per the Warner Bros. Discovery filing. Netflix initially bid $27/share (comprised of $22 cash and $5 of Netflix voting stock) on Nov. 20, followed by its winning $27.75/share ($22.50 in cash and $5.25 of Netflix stock per outstanding share of WBD common stock). Netflix did not “extend any offer of future employment to members of WBD management or any Netflix board seats for WBD’s board members,” the filing says.
Paramount ultimately was vying in the deal against three bidders: Netflix, Comcast and an unidentified third company referred to as “Company C,” described in the filing as “an American media company” that submitted a proposal to buy Discovery Global (WBD’s TV networks business) and 20% of the WBD Streaming & Studios Business including HBO Max for $25 billion in cash. Per the filing, “WBD determined that Company C’s proposal was not actionable at that time.”
In its Dec. 1 bid, Comcast, referred to in the document as “Company A,” proposed combining the WBD Streaming & Studios Business and certain of Comcast’s related businesses for per share consideration of $5.25 in cash and an amount of stock per outstanding share of WBD Common Stock “such that WBD stockholders would own 49% of the combined company.”
Based on a variety of valuation assumptions Comcast set forth in its bid letter, it ascribed a “headline price” of $35.43 per WBD share in the Dec. 1 bid. Comcast’s bid also included a regulatory termination fee of $5 billion and a WBD termination fee of $2.275 billion.
“The WBD Board determined that, while there could be strategic merit in the transaction proposed by Company A, the value of the equity portion of Company A’s bid was uncertain, the percentage of cash in Company A’s proposed consideration mix was lower than that of Netflix and PSKY, and the complex transaction structure would require an extended timeline to complete due diligence and documentation,” per the WBD filing.
“Given that, among other things, Netflix submitted the meaningfully highest bid of the December 1 Bids accompanied by the most readily actionable legal documentation, with few issues remaining to be resolved, the WBD Board unanimously decided to accelerate discussions with Netflix in order to resolve remaining issues in Netflix’s merger agreement markup and other transaction agreements,” according to WBD’s version of events. “At the same time, the WBD Board instructed WBD’s management and advisors to remain engaged with Company A and PSKY, and provide them feedback consistent with the WBD Board’s discussions regarding the deficiencies in their proposals.”
Ultimately, WBD’s board coalesced around Netflix as the winning bidder.
“The terms of the Netflix merger are superior. The PSKY offer provides inadequate value and imposes numerous, significant risks and costs on WBD,” Warner Bros. Discovery’s board said in a letter to shareholders released Dec. 17.
In rejecting Paramount’s $30/share hostile bid for WBD, the board said Paramount “has consistently misled WBD shareholders that its proposed transaction has a ‘full backstop’ from the Ellison family. It does not, and never has.” In addition, the board of Warner Bros Discovery asserted that Paramount Skydance’s $9 billion merger cost synergies target ($3 billion from Skydance-Paramount and $6 billion from a merger with WBD) would “make Hollywood weaker, not stronger.”
From Variety US