The board of Warner Bros. Discovery has delivered a decisive blow to a dramatic takeover attempt, unanimously rejecting a colossal $108 billion all-cash offer from Paramount Global. In a scathing statement released on Wednesday, the board dismissed the last-minute bid as 'illusory' and not in the best interests of its shareholders.
A Scathing Rejection and a Preferred Partner
Instead, the directors reiterated their firm commitment to a pending $82.7 billion combination with streaming giant Netflix. Chairman Samuel A. Di Piazza Jr. urged shareholders to reject the Paramount proposal, stating the board looks forward to 'delivering the compelling and certain value' the Netflix transaction will create. The board launched a direct attack on Paramount CEO David Ellison, accusing him of misleading Warner shareholders by claiming his offer had a 'full backstop' from his family's fortune. 'It does not, and never has,' Di Piazza Jr. wrote.
The statement further criticised the financial structure of Paramount's bid, pointing to a $40.65 billion equity commitment that relies on an 'unknown and opaque revocable trust'. The board asserted that a trust is 'no replacement for a secured commitment by a controlling stockholder' and that the Ellison family had chosen not to fully guarantee the offer. This leaves Paramount's proposal with an 'untenable degree of risk' for Warner shareholders, according to the board.
Diverging Visions for Warner's Future
The two competing offers represent fundamentally different futures for Warner Bros. Discovery. Paramount's bid aimed to acquire the entire company, including linear TV assets like CNN, TBS, and TNT. Netflix, however, is not interested in those legacy channels. Its offer is a mix of cash and stock, meaning Warner investors would receive a stake in a new spinoff company holding those linear assets, alongside the cash component.
Netflix welcomed the board's recommendation in its own statement. The board's confidence in the Netflix deal is underscored by a hefty breakup fee; if Warner walks away, it would owe Netflix $2.8 billion. Paramount's offer remains open until January 8, with an option to extend, but it is unclear if they will improve their terms.
Broader Implications and Political Undertones
The proposed acquisition had stirred significant internal and external concern. Reports suggested the prospect of a Paramount takeover caused 'anxiety' among CNN staff, partly over fears of editorial influence from figures like CBS News' Bari Weiss. The bid also carried political dimensions, with sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi listed as financial partners, alongside a private equity firm run by Donald Trump's son-in-law, Jared Kushner.
David Ellison, 42, is the son of billionaire Larry Ellison, valued at $235.4 billion by Forbes. Reports indicated the elder Ellison had discussed potential programming changes at CNN, including airing CBS's 60 Minutes, if the deal succeeded. Despite this vast wealth, the Warner board concluded the financial assurances for the Paramount bid were insufficient, cementing their path toward the Netflix merger.
