Warner Bros. Discovery (WBD) has once again urged shareholders to reject Paramount Skydance’s unsolicited takeover proposal, according to media reports. The long-standing dispute pits Paramount’s leveraged acquisition of the entire media group against Warner Bros. Discovery’s signed agreement to sell its studio and streaming assets to Netflix,
In a letter to investors, WBD’s board said it unanimously concluded that Paramount’s latest approach still fails to deliver sufficient value and carries substantial execution risks. The rejection keeps alive one of the most contentious corporate battles in recent media history, pitting rival visions for the future of Hollywood against each other. It remains to be seen whether Paramount chooses to escalate the battle by raising its offer, or continue appealing directly to shareholders with its existing bid.
“The Board unanimously determined that the Paramount’s latest offer remains inferior to our merger agreement with Netflix across multiple key areas,” Samuel A. Di Piazza, Jr., Chairman, WBD, announced in an official statement. “Paramount’s offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed. Our binding agreement with Netflix will offer superior value at greater levels of certainty, without the significant risks and costs Paramount’s offer would impose on our shareholders.”
Paramount, controlled by David Ellison and backed by his father Larry Ellison, sought to address WBD’s financing concerns by securing a personal guarantee exceeding $40 billion. Paramount argued the move ensured full funding for the acquisition and resolved questions around deal certainty. WBD disagreed. In regulatory filings accompanying its shareholder letter, the company warned that the proposal would still require an unprecedented level of borrowing, characterizing it as the largest leveraged buyout ever attempted.
The rejection comes as WBD presses ahead with its existing agreement with Netflix, under which the streaming giant would acquire Warner Bros.’ film studios, HBO, and the HBO Max platform. The transaction values those assets at $27.75 per share in a mix of cash and stock, while allowing WBD shareholders to retain exposure to its cable networks through a planned spinoff. WBD argues that this structure offers superior certainty, fewer conditions, and clearer regulatory pathways. Netflix executives Ted Sarandos and Greg Peters reiterated this week that their company has already begun formal engagement with regulators in the United States and Europe. By contrast, Paramount’s offer targets the entire WBD group, including cable networks such as CNN and Discovery—assets whose long-term value remains heavily debated.
One of WBD’s strongest objections centers on the financial penalty of abandoning the Netflix agreement. The company estimates it would incur roughly $4.7 billion in costs if it pivoted to Paramount’s proposal. That figure includes a $2.8 billion breakup fee owed to Netflix, additional interest expenses, and a separate penalty linked to an unfinished debt exchange. While Paramount raised its own termination fee to $5.8 billion, WBD noted that much of that sum would effectively be offset by exit costs, leaving shareholders exposed if the deal failed to close.
Apart from financing, WBD also spoke about concerns over restrictive conditions embedded in Paramount’s proposal. These include limits on large technology investments prior to closing—constraints the board warned could hinder operations for more than a year while giving Paramount an opportunity to walk away if business performance weakens. Such provisions, WBD argued, shift disproportionate risk onto its shareholders during an already volatile period for the media industry.
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