Warner Bros Discovery has formally rejected a revised takeover proposal from Paramount Skydance, choosing instead to move forward with its previously announced agreement with Netflix. The decision, disclosed on Wednesday, signals the board’s preference for what it views as a clearer and less risky transaction amid an increasingly high-stakes contest for one of Hollywood’s most valuable entertainment libraries.
In a letter sent to shareholders, the board of Warner Bros Discovery said it had unanimously voted against Paramount’s amended $108.4 billion hostile bid. Directors argued that the proposal relied on an unusually large amount of debt financing, effectively turning the deal into a leveraged buyout that would expose investors to significant execution and financial risks.
The board reaffirmed its support for an $82.7 billion agreement with Netflix, which would see the streaming giant acquire Warner Bros’ film and television studios along with other assets. According to the company, that offer provides greater certainty of completion and a more balanced risk profile for shareholders.
Paramount and Netflix have been competing for control of Warner Bros and its extensive content portfolio, which includes globally recognized franchises such as Harry Potter, Game of Thrones, Friends and the DC Comics universe, alongside classic films like Casablanca and Citizen Kane. The assets are widely viewed as strategic in an industry increasingly shaped by streaming dominance and consolidation.
The Warner Bros board voted against Paramount’s $30-per-share cash offer on Tuesday. In its communication to investors, the board said Paramount’s financing plan would leave the combined company with approximately $87 billion in debt once the acquisition closed. That level of leverage, it warned, would make the transaction the largest leveraged buyout ever and could severely constrain the company’s financial flexibility.
Paramount had attempted to strengthen its bid by proposing $40 billion in equity personally guaranteed by Larry Ellison, the billionaire co-founder of Oracle and father of Paramount CEO David Ellison. The remainder of the financing would have come from roughly $54 billion in debt. Despite the added guarantee, Warner Bros directors said the offer still fell short on value and certainty.
In its letter, the board said the amended proposal remained inadequate, citing concerns over Paramount’s ability to complete the transaction and the potential costs to Warner Bros shareholders if the deal failed. The assessment followed a 67-page amended merger filing in which the company detailed its objections to the Paramount bid.
The decision keeps Warner Bros on track to complete its agreement with Netflix. The streaming company has offered $27.75 per share in a mix of cash and stock and brings a market capitalization of around $400 billion, along with an investment-grade credit rating. By contrast, Paramount’s credit rating is already classified as junk by S&P Global, a factor the Warner Bros board said would be further strained by the proposed financing structure.
Netflix co-chief executives Ted Sarandos and Greg Peters welcomed the board’s decision, saying it confirmed their offer as the stronger proposal for shareholders, creators and consumers across the entertainment industry.
Paramount did not respond to requests for comment following the announcement. In market trading, shares of Warner Bros and Netflix each rose about 0.6%, while Paramount shares slipped by roughly the same margin.
The outcome underscores how financial structure and balance-sheet strength have become decisive factors in media consolidation talks, particularly as studios navigate high borrowing costs and an uncertain outlook for traditional film and television revenues.
