The board of Warner Bros. Discovery has once again rejected a hostile takeover attempt from Paramount Global, labelling the proposal as financially unsound and risky for shareholders due to its heavy reliance on new debt.
In a statement released on Monday, Warner Bros. Discovery stated that Paramount’s bid would require the acquirer to assume more than $50 billion in additional debt to absorb the significantly larger media group. The board warned that such a structure would introduce “materially more risk for WBD and its shareholders” compared with the competing proposal from Netflix, which the company has previously indicated it favours.
Paramount’s financing plan relied heavily on backing from Larry Ellison, the billionaire co-founder of Oracle. Ellison’s son, David Ellison, currently serves as chairman and chief executive of Paramount. Additional funding sources referenced in the proposal reportedly included capital linked to royal families from Saudi Arabia, Qatar, and Abu Dhabi.
Under the rejected offer, Paramount proposed paying $30 per share for Warner Bros. Discovery—higher than Netflix’s $27.75 per share bid. However, Paramount’s proposal covered the entire company, while Netflix has stated it would exclude Warner Bros. Discovery’s cable television assets, including CNN and TNT Sports.
The Warner Bros. Discovery board had already urged shareholders to dismiss Paramount’s approach in a statement issued last month. That position remained unchanged even after Paramount responded by saying Larry Ellison would personally guarantee his stake, open his family trust’s finances for review, and increase the deal’s breakup fee to match Netflix’s terms.
Despite the renewed rejection, Paramount still has several options. It could take its offer directly to Warner Bros. Discovery shareholders and force a vote, raise its bid beyond $30 per share, or abandon the pursuit altogether.
Paramount launched its hostile bid shortly after Netflix emerged as the leading bidder, following a prolonged contest that culminated in an $82.7 billion proposal. Even if Paramount withdraws, Netflix’s offer is far from assured. The deal is expected to face intense regulatory scrutiny, with some members of the U.S. Congress already voicing strong opposition on antitrust grounds.
Legal challenges have also begun to surface. At least one HBO Max subscriber has filed a lawsuit against Netflix, arguing that the acquisition would reduce competition in the U.S. subscription video-on-demand market. Concerns have additionally been raised about theatrical releases, as reports suggest Netflix may seek to shorten exclusive cinema windows to as little as 17 days if the deal goes through. While Netflix has stated that it will initially continue theatrical releases for Warner Bros. films, it has acknowledged that release windows could shrink over time.
Industry analysts suggest Netflix’s interest in Warner Bros. Discovery is driven largely by its extensive content library. According to reports, the streamer views that catalogue as a strategic asset as it explores future tools involving AI-assisted content creation and distribution.
As the bidding battle continues, Warner Bros. Discovery shareholders now face an uncertain path shaped by high-stakes financing, regulatory hurdles, and a rapidly changing media landscape.
