WBD Board Urges Shareholders to Shun Paramount in Favor of Netflix Deal
Warner Bros. Discovery’s board has urged investors to reject Paramount Skydance’s hostile takeover bid, arguing in a shareholder letter that the offer underdelivers on value and piles on execution risk compared with the company’s agreed deal with Netflix. “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,” WBD chair Samuel A. Di Piazza Jr. said.
The board said that after “extensive engagement” and six prior proposals from Paramount, the latest $30‑per‑share bid still fails to address core concerns it has repeatedly raised. While Paramount argues its proposal implies an enterprise value of $108.4 billion—above Netflix’s roughly $82.7 billion enterprise value and $27.75‑per‑share consideration for WBD’s studio and streaming assets—the WBD board stressed that headline pricing is only part of the equation. Directors pointed to what they described as “significant risks and costs” in the Paramount structure, including the lack of a “full backstop” from the Ellison family on a $40.65 billion equity commitment, which they said instead relies on “an unknown and opaque revocable trust” for crucial deal funding.
Netflix’s agreed transaction would deliver $23.25 in cash and $4.50 in Netflix stock per WBD share, valuing the streaming and studio businesses at $27.75 a share with an equity value of about $72 billion and an enterprise value of roughly $82.7 billion, subject to a collar tied to Netflix’s share price. Paramount, by contrast, has pitched its $30‑per‑share bid as a premium all‑cash offer and has signaled it could raise its price, while also emphasizing that its deal would keep WBD intact rather than carving out only the studio and streaming operations.
WBD’s board nonetheless framed Paramount’s synergy and financing assumptions as aggressive. It highlighted Paramount’s projection of $9 billion in merger synergies as “ambitious from an operational perspective” and warned that the combination “would make Hollywood weaker, not stronger.” By backing Netflix’s proposal as “superior, more certain value,” the board is effectively betting that a cleaner capital structure, defined asset perimeter, and fully committed financing will prove more attractive to shareholders than a higher but, in its view, riskier headline price from Paramount Skydance.