Paramount Skydance rejects raising offer for Warner Bros Discovery amid Netflix competition

Paramount Skydance has maintained its $108 billion hostile bid for Warner Bros Discovery, declining to increase its offer despite competition from Netflix. The media company, led by David Ellison, has reiterated its $30 per share cash proposal whilst rejecting suggestions that it should match rival bids.

The cash offer remains straightforward in its valuation, according to Paramount executives. This contrasts sharply with Netflix’s $83 billion proposal, which combines cash and share components and has already diminished in total value owing to recent declines in Netflix equity prices. Under Netflix’s proposed structure, Warner shareholders would receive $23.25 in cash and $4.50 in Netflix stock per share.

Netflix’s offer includes a significant complication; the television networks business would undergo a spinoff into a separately listed entity before the transaction concludes. This spinoff includes valuable properties such as CNN and the Discovery Channel. Paramount has contended that this television business represents effectively worthless value based on recent market comparisons.

The comparison centres on Versant Media, a peer company spun off by Comcast this week onto Nasdaq. Versant’s share price has declined nearly 30 percent since its market debut on Monday. This decline suggests that the separated television networks business holds minimal equity value, according to Paramount’s analysis. Warner has previously disputed these comparisons, asserting that its television networks division possesses greater scale, profitability, and international geographic diversity than peers like Versant.

David Ellison stated that Paramount’s offer “clearly provides WBD investors greater value and a more certain, expedited path to completion.” The Oracle co-founder Larry Ellison, Paramount’s father and one of the world’s wealthiest individuals, has provided personal assurance to guarantee portions of the financing required for the deal’s completion.

The hostile tender offer, launched directly to Warner shareholders on 8 December, expires on 21 January. Warner’s board previously accepted Netflix’s studios and streaming business proposal on 5 December, though it rejected Paramount’s bid on 7 January, describing the offer as inadequate. The outcome remains uncertain as shareholders evaluate their options against the expanding deadline.