Ask Onix
Warner Bros rejects Paramount's latest offer
Warner Bros Discovery has once again advised its shareholders to turn down a revised acquisition proposal from Paramount Skydance, calling it "inferior" to the existing agreement with Netflix.
Board stands by Netflix deal
The Warner Bros board of directors reiterated its unanimous support for the $72 billion (£54 billion) agreement with Netflix, announced on 5 December, which covers the company's film and streaming divisions. In a statement, board chair Samuel Di Piazza Jr. criticized Paramount's bid for its "extraordinary amount of debt financing" and lack of protections for shareholders if the deal fails to close.
"Paramount's offer continues to provide insufficient value, with terms that create risks and offer little certainty. Our binding agreement with Netflix delivers superior value with far fewer risks for our shareholders."
Samuel Di Piazza Jr., Warner Bros Board Chair
Key differences between the bids
Netflix's offer focuses solely on Warner Bros' film and streaming assets, following the company's planned split into two divisions later this year. In contrast, Paramount's proposal seeks to acquire the entire Warner Bros business, including cable networks like CNN, TNT, and Discovery, as well as free-to-air channels in Europe.
Paramount initially offered over $108 billion for Warner Bros in December, a bid the board unanimously rejected. After amending its proposal, Warner Bros stated in a letter to shareholders on Wednesday that the revised offer remained "not superior, or even comparable, to the Netflix merger."
Financial concerns and risks
The Warner Bros board highlighted several issues with the Paramount bid, including a $2.8 billion penalty Warner Bros would incur for terminating its agreement with Netflix. Additionally, the board noted that Paramount, with a market value of $14 billion, is attempting an acquisition requiring over $94 billion in debt and equity financing.
"The extraordinary debt financing and other terms of Paramount's offer increase the risk of failure to close, especially when compared to the certainty of the Netflix merger."
Warner Bros shareholder letter
Paramount yet to respond
Paramount has not commented on Warner Bros' latest rejection. Meanwhile, Netflix co-CEO Ted Sarandos previously described the streaming giant's deal with Warner Bros as "in the best interest of stockholders."
