Warner Bros. Discovery Board Rejects Paramount’s $108 Billion Hostile Bid, Clears Path for Netflix Deal

After weeks of intense takeover competition, the board of Warner Bros. Discovery has decided to reject a hostile acquisition offer worth approximately $108 billion from Paramount Skydance, unanimously recommending that shareholders support the existing agreement with Netflix instead.

According to informed sources, following a review on Tuesday, Warner’s board concluded that Paramount’s proposal contained “significant flaws” in its financing structure, deal certainty, and operational flexibility, whereas Netflix’s earlier offer—valued at around $83 billion including debt—provides stronger overall value and execution certainty.

Financing Structure Emerges as Key Obstacle

The core reason for the rejection centers on the Warner board’s deep concerns over Paramount’s proposed equity financing framework. Nearly half of the equity funding in Paramount’s proposal—about $40.7 billion—is reportedly backed by a “revocable trust” managed by the family of Oracle founder Larry Ellison. The board noted that such a trust legally allows assets to be withdrawn at any time, and the related documents “contain loopholes and limitations” that could pose unforeseeable risks during the lengthy regulatory approval period before deal completion.

Additionally, Warner believes Paramount’s terms would severely restrict the company’s ability to operate independently and manage its balance sheet while awaiting regulatory clearance—concerns that Netflix has addressed with more actionable commitments.

Paramount Hinted at Higher Offer but Failed to Alleviate Doubts

Although Paramount withdrew certain funding sources—including $1 billion from Tencent—in a revised proposal submitted last week and pledged to guarantee a $5 billion breakup fee, its $30-per-share offer was still deemed “inadequate in value” and “structurally inferior” by Warner’s board. Paramount had previously publicly stated that the offer was “not final,”暗示仍有提价空间, yet it failed to fundamentally address Warner’s doubts regarding funding reliability and operational autonomy.

Board Unanimously Backs Netflix Agreement

In a letter to shareholders, Warner’s board clearly stated that the merger agreement with Netflix is “superior in terms of value, certainty, and terms.” Under that agreement, Netflix would acquire Warner’s film and TV studios, streaming business, and content assets such as HBO for $27.75 per share, while Warner shareholders would also receive corresponding equity in the spun-off cable networks, including CNN and TNT.

If the deal proceeds smoothly, Netflix will pay Warner a $2.8 billion termination fee; if Paramount ultimately succeeds, it would be responsible for covering this amount.

Takeover Battle Reflects Intensifying Industry Consolidation

The acquisition contest began in early December when Netflix and Warner reached a preliminary agreement. Paramount abruptly launched a “counteroffer” three days later with a higher bid, directly appealing to Warner shareholders and triggering one of Hollywood’s most high-profile asset battles in recent years. Both proposals face strict antitrust scrutiny, with former U.S. President Donald Trump having previously expressed concerns about the potential market concentration resulting from a Netflix-Warner deal.

Currently, Warner’s stock price hovers around $29, with some investors still anticipating the possibility of a higher offer. The company must formally respond to Paramount’s proposal by December 22.

Next Phase Outlook

With the board’s position now clear, the Warner-Netflix deal is expected to proceed as originally planned unless Paramount can present a significantly improved proposal that thoroughly resolves financing and operational constraints in an extremely short timeframe. Regardless of the outcome, this contest has clearly revealed that, against the backdrop of intensifying streaming competition, the strategic value of traditional entertainment giants is attracting renewed interest from technology and capital forces.