Warner Bros. Discovery Rejects Paramount’s $30-Per-Share Bid, Calls It “Too Risky and Low Value”

Warner Bros. Discovery has officially rejected Paramount Skydance’s $30 per share, all-cash offer to buy the company, saying the deal doesn’t offer enough value and carries too many risks. The decision was announced in a letter to shareholders, where the board said the $108.4 billion bid is “inadequate” and “inferior” compared with WBD’s planned merger with Netflix.

The Paramount offer included backing from Oracle co-founder Larry Ellison and financing from investors in the Middle East, but the board said the deal would still impose $4.7 billion in extra costs, including termination fees and interest, if it failed to close. “In comparison, the Netflix transaction imposes none of these costs on WBD,” the board said.

WBD’s board also highlighted that Paramount’s offer relies heavily on debt, nearly seven times the company’s market cap, which makes the deal risky. The leveraged buyout would require $87 billion in debt and could take 12 to 18 months to complete.

“This aggressive transaction structure poses materially more risk for WBD and its shareholders when compared to the conventional structure of the Netflix merger,” the board wrote.

The Paramount bid would also limit WBD’s ability to run its business normally, including restrictions on key agreements, the planned separation of Discovery Global, and refinancing of a $15 billion bridge loan. Meanwhile, Netflix’s merger is described as safer, with an investment-grade balance sheet, strong free cash flow, and more operational flexibility.

Netflix co-CEOs Ted Sarandos and Greg Peters welcomed WBD’s decision, calling the Netflix deal “the superior proposal that will deliver the greatest value to its stockholders, as well as consumers, creators and the broader entertainment industry.” They added that combining Netflix and Warner Bros. would expand content options for viewers and opportunities for creators.

WBD shareholders can still choose to tender their shares to Paramount Skydance until January 21, but without board support, Paramount would need at least 90% of shares to complete the deal. As of mid-December, Paramount owned less than 1% of WBD’s stock.

The WBD board concluded that Netflix’s merger better protects shareholders, reduces risk, and preserves the company’s planned initiatives. “We are focused on advancing the Netflix merger to deliver its compelling value to you,” the letter said.

The rejection marks another setback for Paramount, which has tried multiple bids over the past few months. The board said Paramount failed to address previous concerns about the deal’s structure and financing.

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