Warner Bros. Discovery has hit back at David Ellison’s latest salvo at Paramount Skydance, saying more than 93% of shareholders rejected Paramount’s “poor plans” in support of WB’s $83 billion sale to Netflix.
WBD was responding to Paramount’s announcement on Thursday that it was extending its hostile takeover offer of $30 per share in cash to Warner Bros. Discovery shareholders until February 20th. Paramount has filed a motion asking WBD shareholders to vote against the Netflix acquisition at the Warner Bros. Discovery special meeting scheduled for April.
Warner Bros. Discovery said in a statement: “Paramount is repeating the same offer that the board has repeatedly and unanimously rejected in favor of a superior merger agreement with Netflix. Also, more than 93% have rejected Paramount’s inferior plans. “It’s clear that our shareholders agree. We are confident in our ability to obtain regulatory approval for our merger with Netflix and look forward to the significant and robust value that the deal will deliver to Warner Bros. Discovery shareholders.”
WBD’s board of directors has rejected Paramount’s M&A proposals eight times.
If Paramount Skydance is unable to convince WBD shareholders, who own more than 90% of the company’s outstanding shares, to support the offer by February 20th, and Paramount is unlikely to succeed here given that the WBD board strongly supports a deal with Netflix, Ellison will be forced to extend the tender offer deadline again if his company chooses to continue with its hostile takeover campaign.
What could tip the scales in Paramount’s favor would be to raise the price of its offer for all of Warner Bros. Discovery.
Paramount’s bid is backed by billionaire Larry Ellison, David Ellison’s father and co-founder of Oracle, who has personally committed $40.4 billion to the future deal, as well as partners including Redbird Capital Partners and sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi.
But sources familiar with the thinking of Paramount Skydance and its financial backers say the media company is not prepared to sell more than $30 a share at this time. In announcing the extension of its tender offer, Paramount Skydance said it “reaffirms its commitment to transacting with WBD at an enterprise value of $108.4 billion, which is significantly larger and more certain than the $82.7 billion assumed enterprise value in the Netflix transaction.”
Netflix upgraded its deal to acquire Warner Bros. Discovery’s TV and movie studios and HBO Max streaming business on Tuesday (January 20) by replacing the previous cash and stock deal with an all-cash offer worth $27.75 per share. The purpose of this was to deny Paramount’s argument that its proposal was superior because it was all cash.
Netflix and WBD said the deal is expected to close within 12 to 18 months after signing the original deal on December 4, 2025, pending regulatory approval and WBD shareholder approval. Netflix’s deal with Warner Bros. is completed on the heels of WBD’s planned third-quarter spinoff of Discovery Global, which will include cable networks such as CNN, TNT, TBS, HGTV and Food Network, as well as TNT Sports and Discovery+.
Meanwhile, Paramount sued WBD’s board earlier this month, demanding disclosure of financial details, including how Discovery Global was valued. According to Paramount’s analysis, Discovery Global’s stock would be worthless (though it acknowledged that Discovery Global’s theoretical M&A value would be $0.50 per share). In documents filed with the SEC on Tuesday in connection with its revised all-cash deal with Netflix, Warner Bros. Discovery disclosed details of its Discovery global entity, including five-year financial projections for CNN and other assets. No court order required. WBD said the board’s analysis of “selected public companies” on a sum-of-parts basis showed that Discovery Global’s approximate implied stock value reference range was $2.41 to $3.77 per share. Additionally, the company said its analysis of Discovery Global (based on some transaction analysis) considering potential future acquisitions indicated that Discovery Global’s per share value was between $4.63 and $6.86.
Paramount claimed on Thursday that WBD “continues to omit very important information that shareholders need about Discovery Global.” In other words, how much debt will WBD ultimately transfer to Discovery Global? WBD said Discovery Global’s target net debt is $17 billion as of June 30, 2026, decreasing gradually to $16.1 billion as of December 31, 2026. As part of the upgraded terms, Netflix has agreed to reduce the specified amount of net debt owed by Discovery Global by $260 million.
Paramount noted that if WBD were to allocate a portion of Discovery Global’s $17 billion in fixed debt (as of June 30) to WBD’s streaming and studio businesses, it would “reduce the per-share consideration that WBD stockholders would receive” under Netflix’s proposal.
“Despite the fact that Discovery Global’s capital structure will directly determine the amount that WBD shareholders will actually receive in the Netflix transaction and that WBD will be required to disclose such information along with full financial information about Discovery Global upon separation, WBD plans to seek shareholder approval for the Netflix transaction without this information,” Paramount Skydance said.
Under its latest deal with WBD, Netflix said it will assume $10.7 billion in Warner Bros.’ net debt. The World Bank acquisition will be financed with $20 billion in cash on hand and $52 billion in borrowings. In an all-cash deal priced at $27.75 per share, Netflix secured $42.2 billion in debt financing from Wells Fargo, BNP and HSBC.
