Warner Bros. Urges Shareholders to Say No to Paramount Takeover
Warner Bros. Discovery is asking its shareholders to reject Paramount Skydance’s takeover bid, saying that Netflix’s deal would be better for customers and the company’s future. The studio sent a letter to investors urging them to turn down the offer.
“The WBD Board urges you to reject Paramount Skydance’s unsolicited, inferior and illusory tender offer,” the company wrote.
Paramount went hostile last week, asking shareholders to ignore Warner’s preferred deal with Netflix. Paramount is offering $30 per Warner share, slightly higher than Netflix’s $27.75 offer. Even so, Warner’s board maintains that Netflix’s bid is more secure and in the company’s best interest.
The potential mergers are under intense scrutiny. Either deal would change Hollywood’s landscape, affecting movie production, streaming services, and, in Paramount’s case, news operations.
Paramount’s bid includes Warner’s cable networks, like CNN and Discovery, while Netflix’s offer does not. If Netflix’s deal is approved, it would only close after Warner completes its planned separation of cable operations.
Paramount claims it made six different offers that Warner rejected before launching its shareholder-focused bid on December 5. Warner shareholders, however, can still choose to support Paramount’s offer if they wish.
Critics of Netflix’s deal warn that combining HBO Max with the streaming giant could create too much market power, while Paramount+ is much smaller. Netflix co-CEOs Greg Peters and Ted Sarandos defended their offer, saying, “Our stance then and now is the same—we see this as a win for the entertainment industry, not the end of it.”
Both deals have raised concerns about what they mean for film and TV production. Netflix has promised to honor theatrical release agreements, but some critics worry about its history of prioritizing online releases. Paramount’s attempt to acquire Warner’s cable and news businesses could also trigger questions about editorial control, especially given recent changes at CBS News after Skydance’s $8 billion purchase of Paramount.
Political factors are also in play. President Donald Trump has commented on the deal, noting that Netflix’s bid could create market issues. Paramount’s CEO, David Ellison, is the son of Oracle founder Larry Ellison, and the family trust has backed the Paramount bid financially.
Trump’s son-in-law Jared Kushner’s investment firm, Affinity Partners, had planned to support the deal but recently withdrew. International investors, including sovereign wealth funds from Saudi Arabia, Abu Dhabi, and Qatar, are backing Paramount.
Warner Bros. argues that Netflix’s deal is safer. In its letter, the company wrote, “There are no contingencies, no foreign sovereign wealth funds, and no stock collateral or personal loans. We are a scaled company with a +$400 billion market cap and a strong investment grade balance sheet. The (Paramount Skydance) offer has numerous risks and uncertainties, among which are Paramount’s financial condition and creditworthiness.”
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