Warner Bros. Discovery Snubs Paramount’s $108 Billion Takeover Play, Deeming It Inferior

Quick update on the WBD drama: the board just swatted away David Ellison and Paramount's latest swing — $30 per share, roughly a $108 billion package — and doubled down on its Netflix deal as the better, cleaner path. Not exactly a shocker, but the fine print here is... spicy.

Where things stand

Warner Bros. Discovery's board formally rejected Paramount's tender offer, calling it too low and too messy compared to the merger agreement WBD already inked with Netflix. The board says they've seen versions of this proposal six times now, and the new one doesn't fix the old problems.

"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. This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of their six previous proposals. We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination."

Why the board said no

Two big issues: price and certainty. WBD argues the value just doesn't add up, and the way Paramount and Ellison want to fund it creates a lot of headaches. The board also flagged the backstop for the deal — the financial safety net Ellison proposed. WBD says the backstop relied on a trust tied to Larry Ellison, but with limited disclosure on assets and liabilities and the possibility that those assets could move, they weren't comfortable. On TV, the board chair described it as an irrevocable trust offered late in the game — either way, the message was the same: not good enough.

Then there is the funding mix, which is where eyebrows really went up:

• Saudi Arabia's Public Investment Fund: $10 billion
• Abu Dhabi: $7 billion
• Qatar Investment Authority: $7 billion

WBD called out those sovereign fund contributions as risk factors. Add it all together, and the board says the Netflix deal is safer, simpler, and better for shareholders.

About that December 4 deja vu

The rejection also wasn't exactly a surprise inside the building. WBD says Paramount's tender is basically the same pitch they floated on December 4 — the one WBD moved on from when it agreed to merge with Netflix.

So what happens now?

With the board's rejection on the record, Paramount and Ellison can regroup and come back with more money. If they do, Netflix can match or counter, which could reboot the bidding war. In the meantime, WBD is treating the Netflix merger as the frontrunner.

What Netflix is saying

Netflix is very publicly confident. Co-CEO Ted Sarandos framed the WBD decision as validation that their agreement is the best outcome for shareholders, creators, and viewers. He also emphasized how Netflix sees this combination working in practice — pairing Netflix's machine with Warner Bros.' theatrical operation, the TV studio, and HBO, while keeping theatrical releases on a traditional window. Co-CEO Greg Peters echoed the same point on CNBC: in Netflix's view, their structure is the clean, certain path forward.

What Ellison is signaling

David Ellison has told WBD CEO David Zaslav that Paramount is willing to go above $30 a share. Translation: they know they need to sweeten the pot to stay in the game.

The bottom line

WBD says the Netflix merger is superior and more certain. Paramount's current offer is out. If Ellison comes back with a bigger, cleaner bid, we could see another round — and Netflix will get a chance to answer. Place your bets: does Netflix close this, or does Paramount crank the number high enough to flip the board? Drop your read in the comments.