Warner Bros. Tells Investors to Reject Paramount’s Buyout Bid

Warner Bros. Discovery is urging its shareholders to turn down a takeover bid from Paramount Skydance, arguing that Netflix’s offer is safer and better for the company’s long-term interests. In a letter to investors, Warner Bros. said, “The WBD Board urges you to reject Paramount Skydance’s unsolicited, inferior and illusory tender offer.”

Paramount launched a hostile bid last week, offering $30 per share, slightly higher than Netflix’s $27.75 per share. The studio asked shareholders to bypass Warner’s preferred Netflix deal and consider its own offer.

The Paramount bid would acquire all of Warner Bros., including cable properties like CNN and Discovery, while Netflix’s offer does not include the cable operations. Any deal with Netflix would only close after Warner completes the planned separation of its cable assets.

Paramount has stated it made six previous bids that Warner rejected before going public with the offer on Dec. 5. Despite Warner’s opposition, shareholders can still choose to accept Paramount’s proposal.

Critics warn that merging Netflix with Warner’s HBO Max could give Netflix too much streaming power, while Paramount+ is smaller and less dominant in the market. Netflix co-CEOs Greg Peters and Ted Sarandos defended their bid, saying in a filing, “We see this as a win for the entertainment industry, not the end of it.”

The competing bids have raised concerns about Hollywood’s future, especially regarding film and TV production. Warner’s letter emphasized that Netflix’s offer has fewer risks, with no foreign sovereign wealth involvement, stock collateral, or personal loans. The company said Paramount’s financial stability is uncertain and the bid carries “numerous risks and uncertainties.”

Political factors could also play a role. President Donald Trump has commented on the deal, noting potential market concerns.

Trump has ties to Larry Ellison, the father of Paramount CEO David Ellison, whose family trust and other investors, including foreign sovereign wealth funds from Saudi Arabia, Abu Dhabi, and Qatar, have backed Paramount’s bid. Affinity Partners, led by Trump’s son-in-law Jared Kushner, initially pledged support for Paramount but recently withdrew.

Warner Bros.’ letter and public statements make it clear the board favors Netflix’s offer. However, the final decision rests with shareholders, who can weigh the risks and benefits of both proposals.

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