Warner Bros. Discovery’s board has officially rejected the $108 billion takeover bid from Paramount Skydance, led by David Ellison, and has reaffirmed its support for the deal with Netflix. Paramount and Ellison’s backers, including Larry Ellison, will now consider their next steps after this rejection.
The board of Warner Bros. Discovery stated that the Netflix deal, which involves the sale of Warner Bros. studios, HBO, and HBO Max to the streaming giant for $27.75 per share, is superior to the offer from Paramount Skydance. They emphasized that the Paramount offer does not meet the criteria of a ‘Superior Proposal’ and urged shareholders to reject it.
In a letter to shareholders, Warner Bros. Discovery highlighted the inadequacy of the Paramount offer and the risks associated with it. They pointed out that Paramount had misled shareholders about the full backing of the Ellison family and raised concerns about the opaque financing structure proposed by Paramount.
The board also expressed doubts about the regulatory risks and financial stability of Paramount’s offer, stating that it could be terminated or amended at any time before completion. They emphasized that the Netflix merger is a binding agreement with enforceable commitments and robust financial backing.
Furthermore, Warner Bros. Discovery criticized Paramount’s projected cost synergies and the potential impact on the entertainment industry. They highlighted Netflix’s identified cost synergies and the value they believe the merger will bring to shareholders, creators, and consumers.
In response to the rejection, Netflix released a statement welcoming the board’s decision and emphasizing the benefits of their deal with Warner Bros. Discovery. Netflix executives expressed confidence in obtaining regulatory approvals and delivering value to stakeholders.
The board’s thorough evaluation process and transparency in engaging with all parties were emphasized, underscoring their commitment to acting in the best interest of shareholders. They urged shareholders to carefully consider the details provided in the SEC filing and reiterated their confidence in the Netflix merger.
Overall, Warner Bros. Discovery’s board remains steadfast in their support for the deal with Netflix and believes it offers the best path forward for the company and its shareholders. The rejection of the Paramount offer signals their commitment to delivering value and certainty to stakeholders.
