LOS ANGELES, Jan 7, 2026, 04:40 PST
Warner Bros Discovery said on Wednesday its board rejected Paramount Skydance’s revised $108.4 billion hostile bid and reaffirmed support for a competing deal with Netflix. It urged shareholders to ignore Paramount’s tender offer, a bid made directly to investors to buy their shares. 1
The rebuff keeps a rare, public fight for a Hollywood media group in motion, with Paramount trying to unravel Warner’s $82.7 billion agreement with Netflix. Netflix is seeking Warner’s film and TV studios plus HBO assets, while Paramount has bid for the whole company, including legacy cable brands such as CNN. 2
In its statement, Warner said Paramount’s offer, amended on Dec. 22, did not qualify as a “Superior Proposal” under its merger agreement with Netflix announced on Dec. 5 — contract language that can allow a company to switch to a clearly better deal. The board repeated its recommendation that shareholders reject the Paramount offer. 3
Paramount’s proposal offers $30 per share in cash, backed by $40 billion in equity personally guaranteed by Oracle co-founder Larry Ellison and $54 billion in new debt, the filing said. Warner’s board said the structure would leave the combined business with about $87 billion in debt, calling it the largest leveraged buyout in history — a takeover funded mostly with borrowed money. 4
Warner said the cost of walking away from Netflix would total about $4.7 billion, or $1.79 per share, including a $2.8 billion termination fee and other financing-related charges. Under the Netflix agreement, Warner said shareholders would get $23.25 in cash plus Netflix stock with a target value of $4.50, and keep an interest in the planned Discovery Global spinoff; it also pointed to Netflix’s investment-grade profile and an estimate of more than $12 billion in free cash flow for 2026. 5
“The Board unanimously determined that the Paramount’s latest offer remains inferior,” Samuel A. Di Piazza Jr., chair of Warner’s board, said, citing “an extraordinary amount of debt financing” and what he described as weak protections if the deal fails. 6
Netflix co-CEOs Ted Sarandos and Greg Peters welcomed Warner’s decision, saying it recognizes Netflix’s transaction as “the superior proposal” for shareholders and the broader entertainment industry. Paramount did not immediately respond to a request for comment, and Warner shares closed at $28.47 on Tuesday. 7
Paramount has argued its bid would face fewer regulatory obstacles, but it would also create a new rival to Disney by combining two major TV operators and two streaming services. The value assigned to Warner’s planned Discovery Global spinoff has become a sticking point: analysts have pegged the cable channels at up to $4 per share, while Paramount has suggested about $1; lawmakers have also raised concerns about further media consolidation, and U.S. President Donald Trump has said he plans to weigh in. 8
Some investors have said the higher cash headline is not enough on its own, given the fees tied to switching paths. “The changes in the amended offer … are necessary, but not sufficient,” Alex Fitch, a portfolio manager at Harris Oakmark, told Reuters in an email in December. 9
But the endgame is still messy: a separate filing said Warner’s board met on Jan. 6, noted improvements such as Ellison’s personal guarantee and a higher $5.8 billion reverse termination fee — money the bidder pays if it cannot close — yet still faulted Paramount for not covering the Netflix breakup fee and for restrictions that would limit refinancing. The board also set up a four-member ad hoc committee to oversee the review of talks while the full board keeps final authority, and Paramount said its amended offer was not “best and final” even as it left the price unchanged. 10
