The Paramount logo is displayed on the water tower at Paramount Studios on December 8, 2025 in Los Angeles, California.
Mario Tama | Getty Images
The Warner Bros. Discovery board on Wednesday said it unanimously recommended that WBD shareholders reject a takeover offer from Paramount Skydance and stick with a “superior” proposal from Netflix.
Last week, Paramount launched a hostile bid for WBD, taking a $30-per-share, all-cash offer directly to shareholders. Paramount Skydance CEO David Ellison has argued the deal, which equates to an enterprise value of $108.4 billion, is better than Netflix’s and that a Paramount-WBD combination would have better chances of winning regulatory approval.
“Following a careful evaluation of Paramount’s recently launched tender offer, the Board concluded that the offer’s value is inadequate, with significant risks and costs imposed on our shareholders,” Samuel Di Piazza, chair of the Warner Bros. Discovery board, said in a news release. “We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination.”
The formal rejection, which was expected, potentially sets the stage for a new, higher bid from Paramount. Ellison told CNBC last week he had already informed WBD CEO David Zaslav that the $30-per-share bid isn’t the company’s “best and final” offer. Paramount can announce a new offer, aimed directly at shareholders, at any time.
If Paramount does up its bid, WBD signaled in its rejection it wants more of the funding to come directly from the Ellison family.
The WBD board noted the Paramount bid includes more than $40 billion of financing that is separate from the Ellison family despite Paramount claiming the funding has a “full backstop” from the family. On Tuesday, Jared Kushner’s Affinity Partners exited its involvement in the bid, which also includes roughly $24 billion from Gulf state sovereign wealth funds.
“Despite their own ample resources, as well as multiple assurances by PSKY during our strategic review process that such a commitment was forthcoming – the Ellison family has chosen not to backstop the PSKY offer,” the board said in a letter to shareholders.
Di Piazza told CNBC’s David Faber on “Squawk Box” Wednesday morning that the board would have appreciated more involvement from Ellison’s father, billionaire Oracle co-founder Larry Ellison.
“We were not confident that one of the richest people in the world would be there at closing,” Di Piazza said. “Doing a deal is great, closing a deal is better.”
Netflix has proposed a cash-and-stock transaction for WBD’s streaming and studio assets, worth an equity value of $72 billion or enterprise value of roughly $83 billion, including debt. Under that deal, Warner Bros. Discovery’s portfolio of cable networks would be spun out into a separate entity.
“Netflix made a compelling offer — it was heavy in cash, certainty of close, a high termination fee, and they responded to the operating issues that we were concerned about,” Di Piazza told CNBC. “PSKY had every opportunity to deal with that broad range of issues, and they chose not to.”
WBD noted that Netflix’s bid had “no need for any equity financing and robust debt commitments,” given Netflix’s market valuation of more than $400 million.
“It was not a hard choice,” Di Piazza told CNBC.
He also dismissed antitrust questions surrounding both proposals: “Either of these deals can get done. Both of these deals will have to fight their way through the [Department of Justice].”
Di Piazza said the company will hold a shareholder vote in spring or early summer, though he said the date hasn’t been set.
Mario Gabelli, GAMCO Investors CEO and a WBD shareholder, told CNBC’s Becky Quick on Wednesday that while he was previously leaning toward the Paramount offer, “the most important part is to keep it in play,” hoping for more back and forth from both bidders.
Netflix on Wednesday said it “welcomes” the Warner Bros. Discovery board’s recommendation.
“This was a competitive process that delivered the best outcome for consumers, creators, stockholders and the broader entertainment industry,” Netflix co-CEO Ted Sarandos said in a statement. “Netflix and Warner Bros. complement each other, and we’re excited to combine our strengths with their theatrical film division, world-class television studio, and the iconic HBO brand, which will continue to focus on prestige television.”
Netflix co-CEO Greg Peters on Wednesday told CNBC the board’s recommendation sends “a pretty clear message.”
“Our deal structure is clean, it’s certain, we’re a scaled company … we’ve got strong investment-grade balance sheet,” Peters told “Squawk Box.”
He similarly dismissed antitrust questions, saying share of U.S. TV viewership is still competitive and that the audiences for Netflix and HBO Max streaming services are complementary.
Peters said if regulators were to take Netflix to court, it would fight for the deal: “We have a good case, and we believe that we should defend that case and make that case strongly.”
