Warner Bros. Discovery (WBD) has officially rejected Paramount Skydance’s revised $108.4 billion acquisition proposal, citing significant risks, uncertainties, and shareholder costs. In a letter to shareholders, the board stated that the offer remained inadequate and lacked certainty regarding completion, making it less favorable compared to WBD’s existing merger agreement with Netflix.
Samuel A. Di Piazza Jr., chairperson of WBD’s board, emphasized that Paramount Skydance’s bid was inferior in terms of value, risk mitigation, and certainty, while the Netflix deal offered shareholders immediate cash and stock benefits. Under the Netflix agreement, shareholders are slated to receive $23.25 in cash plus Netflix shares worth $4.50 per share, based on a collar range tied to Netflix’s share price at closing, with potential for future value growth.
WBD highlighted the substantial termination costs involved in switching deals. Accepting Paramount’s offer would require paying $2.8 billion to Netflix for exiting the current merger agreement, plus an additional $1.5 billion for a failed debt exchange, totaling approximately $4.7 billion or $1.79 per share. By contrast, the Netflix transaction carries no such exit penalties.
Market reaction showed WBD shares down 0.61% at $28.28 in premarket trading, while Paramount Skydance shares rose 1.12% to $12.64.
The board concluded that proceeding with the Netflix merger maximizes shareholder value while limiting downside risk, reaffirming that the decision prioritizes long-term stability and strategic alignment over a high-value but uncertain acquisition attempt.
This decision underscores WBD’s cautious approach to large-scale deals, balancing potential gains against financial and operational risks for shareholders.
