Warner Bros Discovery Rejects Paramount Bid

Warner Bros. Discovery (WBD) said in a Jan. 7, 2026 press release that its board unanimously recommended shareholders reject Paramount Skydance's (PSKY) revised hostile tender offer and urged support for the company’s existing agreement with Netflix. The board cited higher closing risks and financing uncertainty in Paramount’s proposal.

Board Rejection and Rationale

The WBD board described the Paramount Skydance bid as effectively a leveraged buyout that would burden the company with heavy debt and increased junk-credit risk. It warned the offer would impose operating restrictions that could block a planned cable spin-off called Discovery Global. The board also highlighted the substantial costs and uncertainty shareholders would face if PSKY failed to close.

The board reaffirmed that the Netflix merger agreement remains the superior option and did not issue new financial guidance. It stated, "Offer Remains Inferior to Netflix Merger Agreement Across Numerous Key Areas Value is Insufficient Given Significant Costs, Risks and Uncertainties Heightened Risk of Failure to Close Compared to Netflix Combination."

Competing Offers and Fees

Paramount Skydance’s revised offer valued Warner Bros. Discovery at $108.4 billion enterprise value and proposed $30.00 per share in cash for the entire company, including its cable networks. The financing plan included about $40 billion of equity backed by a personal guarantee from Larry Ellison, plus debt ranging from $54 billion to $87 billion.

Netflix’s signed agreement covers WBD’s studios and streaming assets, excluding the full cable networks. It values those assets at $82.7 billion enterprise value (about $72 billion equity) and sets consideration at $27.75 per share, consisting of $23.25 in cash plus Netflix stock valued at $4.50 per share.

Switching from the Netflix deal would trigger termination and financing costs totaling $4.7 billion, including a $2.8 billion fee payable to Netflix, $1.5 billion in lender fees, and $350 million in financing costs, or about $1.79 per share. Paramount Skydance’s reverse termination fee was $5.8 billion.

Paramount Skydance claimed it could close the deal in 10–12 months, faster than the 12–18 month timeline cited for the Netflix transaction. It argued the proposal would face fewer antitrust hurdles and said sovereign investors would address Committee on Foreign Investment in the United States (CFIUS) concerns. No regulatory approvals had been filed at the time.

Key dates include Dec. 5, 2025, when Netflix and Warner announced their merger; Dec. 8, 2025, when PSKY launched its hostile bid; Dec. 16–17, 2025, when WBD’s board first rejected the offer; and Dec. 22–23, 2025, when PSKY amended the offer with Ellison’s equity guarantee and the board reviewed the amendment.