Warner Bros Board Rejects $108 Billion Dollar Paramount Offer Despite Ellison Guarantee

The board of Warner Bros Discovery has decisively rejected a 108 billion dollar hostile bid from Paramount Skydance, marking the ninth rejection of an approach from the media conglomerate since September. The decision came despite a substantial personal guarantee from Larry Ellison, Oracle’s co-founder and father of Paramount Chief Executive David Ellison, who pledged to cover 40.4 billion dollars in equity financing and any potential damages against Paramount.

Warner Bros cited the superior value of Netflix’s 83 billion dollar offer for its streaming and studios division, which the board formally accepted on 5 December. The company maintained that Paramount’s proposal to acquire the entirety of Warner Bros, including legacy television networks such as CNN, presented materially greater financial risk to shareholders compared with the conventional structure of the Netflix transaction.

In a shareholder communication, the board characterised the Paramount proposal as effectively constituting the largest leveraged buyout in history. The acquisition would require the 13.4 billion dollar media group to assume an additional 54 billion dollars in debt from Bank of America, Citigroup and Apollo Global Management. The board concluded that this aggressive capital structure posed substantial risks that outweighed any potential benefits to shareholders.

The rejection triggered criticism from Pentwater Capital, Warner’s seventh largest shareholder, which alleged the board had committed an error by refusing to engage meaningfully with Paramount. Pentwater Chief Executive Matthew C Halbower asserted that Warner had declined to inquire whether Paramount would improve its offer terms. He argued that the board had abdicated its fiduciary responsibility by not exploring potential enhancements to the proposal.

Warner Bros shareholders would receive 30 dollars per share under Paramount’s offer, which includes the entirety of the business and its global television networks. The company’s portfolio encompasses some of the entertainment industry’s most valuable intellectual properties, including Harry Potter, Game of Thrones and DC Studios, alongside a studio operation with roots extending to the silent cinema era.

David Ellison now faces a critical decision regarding whether to raise Paramount’s bid valuation ahead of the 21 January tender offer expiration date. Warner Chairman Samuel Di Piazza Jr indicated during a CNBC interview that potential paths to a deal remained available, provided that Paramount placed a sufficiently compelling and superior offer on the table. The Netflix merger, expected to complete within 12 to 18 months, remains subject to regulatory clearance from federal competition authorities, with particular scrutiny anticipated regarding Netflix’s market dominance in streaming.