Warner Bros. Discovery is pushing back against a $108 billion hostile takeover attempt from Paramount, urging shareholders to reject the cash bid on the grounds that it is financially uncertain and strategically flawed. In a formal appeal to investors, Warner’s board warned that the proposal lacks firm financing commitments and carries material execution risk, arguing that its existing transaction with Netflix offers a safer and more predictable outcome.
Notably, Paramount’s offer was taken directly to Warner Bros. Discovery shareholders after the company’s board declined to engage further. Paramount pitched the bid as a premium, all-cash alternative that would deliver immediate value, but Warner says the structure behind the offer tells a different story. According to Warner’s board, a significant portion of Paramount’s proposed financing depends on arrangements that are neither irrevocable nor fully underwritten. The company has cautioned that this creates the risk of last-minute changes to terms, delays in closing, or even a failure to complete the transaction altogether. Warner’s directors argue that in a deal of this scale, certainty of funding is just as important as headline price, particularly given the weak state of traditional media businesses and the volatile capital markets scenario.
Warner has contrasted Paramount’s bid with its already negotiated agreement with Netflix, which the board describes as binding and fully financed. Under that deal, Warner Bros. Discovery shareholders would receive $23.25 per share in cash and $4.50 per share in Netflix stock, valuing the company at about $82.7 billion. While this valuation is lower than Paramount’s around $108 billion cash proposal, the board argues that the Netflix transaction offers superior certainty of closing and stronger downside protection. The deal also carries a breakup fee of about $5.8 billion, higher than Paramount’s proposed penalty, which Warner states highlights Netflix’s commitment and reduces the risk of disruption and value erosion if market conditions deteriorate.
The board has also warned that walking away from the Netflix deal would be costly, as termination fees, financing penalties, and related expenses could run into several billion dollars. Notably, the entertainment giant would owe a $2.8 billion termination fee alone if it cancels the Netflix agreement to pursue another offer.
At the same time, the financing behind Paramount’s bid has drawn scrutiny following recent changes among its backers. The departure of at least one high-profile financial partner has raised questions about whether the remaining investor group can support the full cash offer on the proposed terms. While regulatory considerations loom over both potential transactions, Warner has argued that Paramount’s offer does not meaningfully reduce antitrust or regulatory risk compared with the Netflix deal. Meanwhile, Netflix welcomed the Warner Bros. Discovery board’s recommendation that shareholders reject Paramount’s hostile bid, calling it a clear endorsement of its own transaction and strategic vision.
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