New York: Warner Bros Discovery (WBD) is preparing to recommend that its shareholders reject a $108.4 billion unsolicited takeover proposal from Paramount Skydance, sources familiar with the company’s boardroom deliberations told Reuters, as the high-stakes bidding battle for one of Hollywood’s most iconic media companies intensifies.
According to insiders, the Warner Bros board is expected to formally advise investors to vote against Paramount’s all-cash offer, which valued WBD at roughly $30 per share, and instead reaffirm its backing for a competing acquisition agreement with Netflix. The board’s recommendation could be filed as soon as Wednesday, industry sources said.
The move marks the latest development in an increasingly heated contest between two of Hollywood’s most powerful players over Warner Bros’ storied assets including its film and television studio, trademark content library and the HBO Max streaming platform. The outcome of the bidding war is being closely watched by Wall Street, regulators and media industry executives alike.
Paramount’s aggressive tender offer was launched in early December directly to Warner Bros shareholders after months of private overtures, with Chairman and CEO David Ellison arguing that his company’s proposal offers “superior value” and a “more certain and quicker path to completion.” The all-cash proposal includes $41 billion in new equity backed by the Ellison family and RedBird Capital and $54 billion in committed debt financing from major lenders such as Bank of America, Citi and Apollo.
Paramount has repeatedly criticized Warner’s existing deal with Netflix, asserting that the cash-and-stock structure of that arrangement subjects shareholders to market volatility, potential regulatory delays, and the uncertainty of operating Warner’s Global Networks business as a standalone, highly leveraged entity. Paramount’s bid was also framed as a bid to build a larger, more competitive global media champion with deeper theatrical and streaming content.
Despite Paramount’s higher cash consideration, Warner Bros’ board appears to be signaling trust in its previously agreed deal with Netflix, under which Netflix would acquire Warner’s core entertainment and streaming assets in a transaction valued at approximately $82.7 billion in a mix of cash and stock. The board views this deal as offering a more balanced combination of value and execution certainty, especially in light of regulatory scrutiny that could affect both transactions.
Netflix leadership has publicly expressed confidence that its agreement will successfully complete, saying it remains fully committed to the acquisition and is prepared to work through any antitrust or other regulatory reviews that may arise.
One complicating factor for Paramount’s bid has been the withdrawal of one of its key financing partners, Affinity Partners, which raised questions about the solidity and structure of the deal’s backing. Warner’s directors are reportedly scrutinizing these financing elements closely in their decision-making process.
Market reaction to the unfolding takeover drama has been significant, with Warner Bros Discovery’s share price hovering near $30 amid the competing offers and broader uncertainty, as investors weigh which path presents the best shareholder value.
The decision to urge shareholders to reject Paramount’s overture underscores the complex dynamics reshaping the global media and entertainment landscape, where content libraries, streaming scale and strategic partnerships have become central to competitive advantage. With two massive bids on the table, Warner Bros’ board’s final stance may have ramifications that extend far beyond Hollywood potentially reshaping the contours of the global streaming wars for years to come.