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Warner Bros. Discovery\u2019s Board of Directors has again unanimously\u00a0recommended that WBD stockholders reject\u00a0the revised offer from Paramount Skydance\u00a0(PSKY) announced December 22, 2025,\u00a0and\u00a0continues to recommend\u00a0that stockholders approve the\u00a0deal\u00a0with Netflix, which said it welcomed Warner\u2019s latest reaffirmation of their binding deal.<\/p>\n
\u201cThe Board unanimously determined that the Paramount\u2019s latest offer remains inferior to our merger agreement with Netflix across multiple key areas,\u201d said Samuel A. Di Piazza, Jr., Chair of the Warner Bros. Discovery Board of Directors. \u201cParamount\u2019s offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed.\u201d<\/p>\n
Since Netflix stunned Hollywood in early December by emerging as the winning bidder in the Warner auction, Paramount has put up a bitter fight, yet neither party has raised the value of its offer yet. Under the terms announced\u00a0December 5, Netflix will\u00a0acquire\u00a0Warner Bros., including its film and television studios, HBO\u00a0Max\u00a0and HBO, in a cash-and-stock transaction valued at $27.75 per WBD share (total enterprise value of approximately\u00a0$82.7 billion; equity value of\u00a0$72 billion). The transaction preserves WBD\u2019s planned separation of Discovery Global, expected in\u00a0the third quarter of\u00a02026.\u00a0<\/p>\n
The Paramount bid is worth an enterprise value of around $108 billion for all of WBD, including Discovery global, and an equity value of about $74.35 billion. The big change to Paramount\u2019s offer on December 22 regarded the personal guarantee of Larry Ellison, father of Paramount owner David Ellison, as the WBD board had objected to the previous offer being guaranteed by a trust. Paramount\u2019s bid also lost the backing of Jared Kushner, President Trump\u2019s son-in-law, halfway through December, although it still features a consortium of Middle Eastern investors, which the WBD board reportedly views as riskier than Netflix\u2019s offer. <\/p>\n
The WBD letter to shareholders did not mention the Middle Eastern aspect in particular, but stressed the fact that Paramount would be a relative minnow swallowing a whale in this transaction. <\/p>\n
\u201cThe extraordinary amount of debt financing, as well as other terms of the PSKY offer, heighten the risk of failure to close, particularly when compared to the certainty of the Netflix merger,\u201d the letter said.\u00a0\u201cPSKY is a company with a $14 billion market capitalization attempting an acquisition requiring $94.65 billion of debt and equity financing, nearly seven times its total market capitalization. To effect the transaction, it intends to incur an extraordinary amount of incremental debt \u2013 more than $50 billion \u2013 through arrangements with multiple financing partners.\u201d The WBD board also noted that this deal would be the largest leveraged buyout in history, with $87 billion of total pro forma gross debt and an estimated gross leverage of approximately 7x 2026E EBITDA before synergies. <\/p>\n
Netflix has\u00a0submitted\u00a0its Hart-Scott-Rodino antitrust filing with U.S. competition authorities and is engaging with regulators, both domestically and in the EU.\u00a0The financing structure is not subject to CFIUS review.\u00a0Closing\u00a0remains\u00a0expected 12\u201318 months\u00a0from signing, subject to regulatory and stockholder approvals.\u00a0<\/p>\n
\u201cThe WBD Board remains fully supportive of and continues to recommend Netflix\u2019s merger agreement, recognizing it as the superior proposal that will deliver the greatest value to its stockholders, as well as consumers, creators and the broader entertainment industry,\u201d said Ted Sarandos and Greg Peters, co-CEOs of Netflix. \u201cNetflix and Warner Bros. will bring together highly complementary strengths and a shared passion for storytelling. By joining forces, we will offer audiences even more of the series and films they love\u2014at home and in theaters\u2014expand opportunities for creators, and help foster a dynamic, competitive, and thriving entertainment industry.\u201d<\/p>\n
The WBD board also said it considered the costs and loss of value for WBD shareholders associated with accepting the PSKY offer, highlighting that it would be obligated to pay Netflix a $2.8 billion termination fee for abandoning its existing merger agreement; incur a $1.5 billion fee for failing to complete our debt exchange, which we could not execute under the PSKY offer without PSKY\u2019s consent; and incur incremental interest expense of approximately $350 million. The total cost to WBD would be approximately $4.7 billion, or $1.79 per share. If Paramount were to return with a higher offer, say $5 billion or so, these concerns would be mitigated, but that hasn\u2019t happened yet.<\/p>\n
Editor\u2019s note: the author worked for Netflix from June 2024 through July 2025.<\/em><\/p>\n<\/div>\n #Largest #LBO #history #Warner #rejects #Paramount #scoffing #billion #worth #debt #billion #bid<\/p>\n","protected":false},"excerpt":{"rendered":" Warner Bros. Discovery\u2019s Board… <\/p>\n","protected":false},"author":1,"featured_media":10182,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[1680,579,575,1627,7650,7651,576,461,580,1649,1656,7652,457,577,78],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/10181"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10181"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/10181\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/10182"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10181"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10181"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10181"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}