Warner Bros. Discovery Turns Down Paramount’s $30-Per-Share Offer, Citing “Insufficient Value”

Warner Bros. Discovery has officially rejected Paramount Skydance’s $30 per share cash offer to acquire the company, saying the bid does not provide enough value and carries too much risk. The board released a letter to shareholders on Tuesday explaining its decision.

The Paramount Skydance proposal was valued at $108.4 billion and included a personal guarantee from Oracle co-founder Larry Ellison to back $40.4 billion of equity financing, along with a $5.8 billion break-up fee.

Despite these measures, Warner Bros. Discovery’s board called the offer “inadequate” and “inferior,” citing both financial and operational concerns.

“They are well aware of the reasons behind the Board’s determination that the Netflix merger agreement is superior to its offer,” the board wrote. They also argued that Paramount’s deal would impose $4.7 billion in costs, including termination fees, debt exchange penalties, and extra interest. In contrast, the Netflix merger does not carry these costs.

The board highlighted the complexity and risks of Paramount’s leveraged buyout plan, which would require $94.65 billion in financing, about seven times Paramount’s current market value, and would rely heavily on debt from banks and investment funds. Warner Bros. Discovery said the structure increases the chance that the deal could fail, potentially harming shareholders.

“PSKY already has a ‘junk’ credit rating and it has negative free cash flows with a high degree of dependency on its legacy linear business,” the board wrote. They added that the offer also restricts Warner Bros. Discovery’s operations, including key agreements and planned initiatives, for up to 18 months.

In comparison, the Netflix merger involves a financially stronger company with a $400 billion market cap, an investment-grade balance sheet, and estimated free cash flow of over $12 billion for 2026.

The WBD board said the Netflix deal allows the company to continue normal operations until closing, protects shareholders with a $5.8 billion break-up fee, and supports planned initiatives like spinning off Discovery Global later in 2026.

Paramount Skydance, led by CEO David Ellison, had made six proposals over 12 weeks, but WBD has consistently rejected them as insufficient. While the board advises shareholders not to tender to Paramount, the offer remains open until Jan. 21, and shareholders could theoretically accept it without board support if they reach a 90% ownership threshold.

Netflix welcomed the rejection. Co-CEOs Ted Sarandos and Greg Peters said, “The WBD Board remains fully supportive of and continues to recommend Netflix’s merger agreement, recognizing it as the superior proposal that will deliver the greatest value to its stockholders, as well as consumers, creators and the broader entertainment industry. Netflix and Warner Bros. will bring together highly complementary strengths and a shared passion for storytelling.”

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