WBD rejects ‘risky’ Paramount bid to stick with Netflix merger

The board of Warner Bros Discovery (WBD) has once again rejected a hostile takeover bid from David Ellison's Paramount Skydance (PSKY), reaffirming its commitment to an $83 billion merger with Netflix. This marks the eighth unsuccessful attempt by Ellison to derail the existing agreement.

In a recent SEC filing, WBD dismissed PSKY's $30-per-share all-cash offer as "inadequate" and fraught with "numerous risks." The board highlighted a staggering financial disparity: PSKY, which has a $14 billion market capitalisation, is seeking nearly $95 billion in financing—almost seven times its own value. This would involve incurring over $50 billion in incremental debt, a move the board deemed dangerously unstable compared to Netflix's $400 billion market capitalisation and superior credit rating.

Furthermore, directors noted that switching to PSKY would trigger approximately $4.7 billion in penalties and costs, including a $2.8 billion termination fee payable to Netflix. Even an "irrevocable" $40.4 billion personal guarantee from billionaire Larry Ellison failed to sway the board. WBD remains focused on the Netflix pact, which includes the planned spin-off of Discovery Global in late 2026, maintaining that it offers shareholders far greater certainty and value.