Warner Bros. Discovery Rejects Paramount Bid, Sticks with Netflix Merger
Warner Bros.
Key Points
- Board unanimously rejected Paramount's Dec 22 offer as inferior to Dec 5 Netflix deal.
- Paramount bid at $108.4B with $30/share cash, backed by Larry Ellison's $40.4B guarantee.
- Criticisms: high closing risks from debt financing, no shareholder protections if deal fails.
- Netflix merger valued at $82.7B including debt, seen as safer option.
Warner Bros. Discovery's board unanimously rejected the latest acquisition offer from Paramount Skydance, deeming it inferior to its existing merger agreement with Netflix.
In a statement released yesterday, Samuel A. DiPiazza Jr., chairman of Warner Bros. Discovery's board, said the revised proposal from Paramount—submitted on December 22—failed to surpass the Netflix deal reached on December 5. The board highlighted higher risks in the Paramount bid, including uncertain debt financing and inadequate protections for shareholders if the transaction falls through.
"The Paramount offer continues to lack sufficient value, with conditions like extraordinary debt financing that create closing risks and no safeguards for our shareholders if the deal doesn't complete," DiPiazza stated.
The Netflix agreement promises greater certainty and value for shareholders, avoiding the substantial risks and costs associated with Paramount's approach, according to the board.
Warner Bros. Discovery first announced its merger with Netflix earlier this month, valuing the company at $82.7 billion including debt. Paramount then launched a hostile takeover bid, which the board dismissed as inadequate a week ago.
The latest Paramount offer maintains a cash price of $30 per share for the entire company, totaling $108.4 billion. This follows a personal guarantee from billionaire Larry Ellison—Oracle co-founder and father of Paramount CEO David Ellison—for $40.4 billion to support the purchase.
Despite the higher headline value of Paramount's proposal on paper, Warner's leadership views the Netflix pact as the safer option.
Original Sources
This article was aggregated from the following Catalan-language sources: