M&A Drama

Warner Urges Shareholders to Reject Paramount

Warner Bros. Discovery’s board has urged shareholders to reject Paramount Skydance’s $108bn hostile bid, saying the Netflix deal offers clearer funding, stronger protections, and a more reliable path to closing.

The media and entertainment giant issued a rare public rebuke against Paramount and the Ellisons billionaire family, who controls it. According to WBD, Paramount has misled shareholders, claiming that the deal has the full financial backing of the Ellisons. Instead, the deal would rely on an “unknown and opaque revocable trust.”

Paramount called claims of misleading “absurd,” insisting the Ellisons are good for the money.

Why the Board Prefers Netflix’s Offer

WBS board says Netflix’s proposal of $83bn enterprise value or $27.75 per share is the safer, cleaner option. In its view, Netflix offers:

• Clearer financing: a transparent cash‑and‑stock deal structure.
• Favorable structure: Netflix buys the studio and HBO, not the TV networks, which would be spun off as Discovery Global and owned by WBD shareholders.
• Equal antitrust risk: the board sees no material difference between the two deals in winning regulatory approvals.
• Higher breakup fee: Netflix agreed to a $5.8bn regulatory‑failure fee vs. Paramount’s $5bn.
• Stronger balance sheet: Netflix is an investment-grade company with a $430bn market cap vs Paramount’s $14bn.

The Mechanics of a Hostile Bid

A hostile takeover is corporate drama at its sharpest. Unlike Netflix’s board-approved agreement, Paramount is bypassing WBD’s board and appealing directly to shareholders, trying to entice them with an all-cash offer at a premium.

If enough investors tender their shares, control shifts without board approval. Sometimes bidders also launch proxy fights, where they seek to persuade shareholders to vote in new directors who will support the deal.

The stakes are enormous: whoever wins gains control of iconic franchises from DC superheroes to HBO prestige dramas and a huge boost to their streaming operations.

Who’s Backing Paramount’s Play

Paramount Skydance’s bid is powered by a coalition. With a market value of about $14 billion and only $3.3 billion in cash on hand last quarter, Paramount cannot finance a $108 billion deal on its own.

The company rests on the financial muscle of the Ellison family, who earlier this year teamed with RedBird Capital to fund the Paramount‑Skydance merger. RedBird is once again involved with the Ellisons to provide equity funding. The bid also leans on sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi, as well as Chinese tech giant Tencent. President Donald Trump’s son-in-law Jared Kushner and his investment firm Affinity Partners have dropped out.

Paramount has $54 billion of debt commitments from Citi, Bank of America, and private lender Apollo.

How the Ellisons Control Paramount Skydance

Paramount Skydance is publicly listed, but CEO and chairman David Ellison — son of Oracle founder and centibillionaire Larry Ellison — holds the power. He controls the company through Class A super‑voting shares, which give him full command over strategy and board direction, including mergers and acquisitions.

In this rare corporate structure, public investors can only take part in the company’s economic value: Class B shares carry zero voting rights. This gives David Ellison full strategic control to pursue bold acquisitions. 

Paramount’s bid offers a whopping 139% premium to the WBD’s undisturbed stock price.

The Fate of Warner Bros. Discovery

Whether Paramount or Netflix wins the bid for Warner Bros. Discovery, the mega-deal faces intense regulatory and political scrutiny both in the US and abroad.

Paramount says Netflix would sweep 43% of the global streaming market with the deal, risking a near-monopoly. Netflix argues the real market to compare to is the wider entertainment space, and warns of huge job cuts if Paramount’s bid wins. 

If the deal goes through, it will be one of the largest ones on record.