Warner Bros. Discovery urged shareholders to turn down Paramount Skydance’s unsolicited tender offer and reaffirmed support for a merger agreement with Netflix announced earlier this month. The board said the Paramount proposal, launched December 8, does not meet the standard of a superior offer and carries material financing and execution risks.
“The offer’s value is inadequate,” said Samuel A. Di Piazza, Jr., chair of the Warner Bros. Discovery board.
The letter to investors followed a strategic review that considered multiple bidders and led to a signed deal with Netflix. The move sets up a direct contest between two of the sector’s largest players for control of Warner Bros. Discovery.
Board backs Netflix merger path
Under the signed merger agreement, Warner Bros. Discovery shareholders would receive $23.25 in cash per share (C$32), plus an additional $4.50 in Netflix stock per share (C$6), alongside value from a planned separation of Discovery Global.
Warner Bros. Discovery also highlighted a $5.8 billion termination fee (C$8.0 billion) in the Netflix deal, pointing to higher certainty of closing and committed financing. It said Paramount’s offer could impose extra costs and delays without matching protections.
The board described the Paramount tender as revocable and subject to change before completion, which it argued reduces deal certainty. Those points formed the basis of the unanimous recommendation to reject the rival bid.
Funding and regulatory questions weigh
Paramount Skydance has countered that its proposal is a $30 per share, all‑cash offer (C$41) and therefore superior on value. The group said it has lined up $41 billion in new equity and $54 billion in debt commitments to fund the acquisition, and that the structure offers a clear path to close.
“Our proposal clearly offers superior value and certainty,” said David Ellison, chair and CEO of Paramount, a Skydance Corporation. Warner Bros.
Discovery disputed those claims in its letter, saying there is no binding equity backstop from the Ellison family and calling the bid illusory. Paramount maintains financing is fully arranged and that regulatory risk is lower than for the Netflix transaction.
Netflix welcomes the board’s recommendation
Netflix said it welcomes the endorsement from Warner Bros. Discovery’s directors and reiterated that its agreement is the most certain route for shareholders. The streaming firm framed the combination as complementary and signalled support for theatrical windows for Warner Bros. films.
Netflix also pointed to its size and investment‑grade balance sheet as reasons its proposal can close on schedule.
The outcome will shape studio funding flows, production pipelines, and distribution partnerships over the next cycle. Netflix added that the deal structure and financing are in place, and that the merger can move to shareholder and regulatory review.