Why is Warner Bros Likely To Reject Paramount’s $108 Billion Bid?

Warner Bros Discovery is expected to turn down Paramount Skydance’s latest takeover proposal, according to Reuters, despite efforts by Paramount to strengthen the financing behind its offer.

Changes to Bid Focus on Financing

The revised bid, which values Warner Bros Discovery at about $108 billion, does not increase the per-share price from earlier proposals. However, it includes changes aimed at addressing concerns raised by Warner Bros’ board. These include a higher reverse termination fee and an extension of the tender offer deadline.

Paramount has also sought to bolster confidence in the deal by securing additional financial backing. Oracle co-founder Larry Ellison has agreed to personally guarantee a significant portion of the equity financing tied to the bid, the source said.

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Despite these changes, Warner Bros Discovery’s board is likely to maintain its opposition to the offer, citing continued concerns over deal certainty and execution risks. The company has previously advised shareholders not to tender their shares into Paramount’s offer.

WBD Backs Rival Netflix Transaction

Warner Bros Discovery is currently pursuing an alternative transaction with Netflix, a deal that its board views as offering greater certainty, even though it carries a lower headline valuation. Exiting that agreement would trigger a multi-billion-dollar breakup fee.

Paramount Skydance has argued that its proposal would face fewer regulatory obstacles and create a larger combined media group, but Warner Bros Discovery has so far shown little indication of shifting its stance.

Neither Warner Bros Discovery nor Paramount Skydance immediately responded to requests for comments by Reuters. 

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