Warner Bros rejects revised Paramount bid, continues with Netflix

Warner Bros Discovery is sticking with Netflix, and no amount of money can change it. The board has unanimously turned down Paramount Skydance's revised $108.4 billion deal to overtake the studio.

To acquire one of the oldest Hollywood studios, David Ellison's Paramount filed a new amended offer of $30 per share, an all-cash offer on Dec 22, with Billionaire Larry Ellison, father of David and Oracle cofounder, offering a $40.4 billion personal guarantee to Paramount's hostile bid.

Warner Bros. Discovery rejects Paramount’s revised offer

Warner Bros is sticking with Netflix with their $82.7 billion deal. Paramount has again failed a rejection as on Wednesday (7 Jan), in a letter to shareholders, Warner Bros' board said Paramount's offer hinges on "an extraordinary amount of debt financing"

The board "has unanimously determined that Paramount Skydance's tender offer... is not in the best interests of WBD and its shareholders and does not meet the criteria of a 'Superior Proposal' under the terms of WBD's merger agreement with Netflix," the company said in a statement.

This was Paramount's eighth offer to Warner Bros.

In an SEC filing, the board compared Paramount's deal with Netflix, saying that Paramount Skydance’s offer “is not more favourable to WBD stockholders than the Netflix Merger and continues to be inadequate,” stating the reason, “insufficient value, taking into account price and numerous risks, costs and uncertainties.”

In the statement, they have also taken note of the amount of debt that Paramount had to take on to buy the studio. They highligted of how Paramount would have to take on a debt of some $54 billion to crack this deal, and this on the top of the $33 billion debt Warner Bros already has.

“PSKY is a company with a $14 billion market capitalization attempting an acquisition requiring $94.65 billion of debt and equity financing, nearly seven times its total market capitalization,” the WBD letter says. “To effect the transaction, it intends to incur an extraordinary amount of incremental debt – more than $50 billion – through arrangements with multiple financing partners.”

In contrast, WBD finds Netflix a much stronger financial, stating that it has a market capitalisation of approximately $400 billion and an investment-grade balance sheet, an A/A3 credit rating and estimated free cash flow of more than $12 billion for 2026.

To match Netflix, Paramount has also increased the termination fee to $5.8 billion that they will pay to Warner Bros if the deal fails to close.

Netflix and Paramount's separate deals

On Dec 5, one of the biggest news stories in the entertainment world broke when streaming giant Netflix announced that it is buying Warner Bros. in a historic deal valued at $82.7 billion. However, two days later, on Dec 7, Paramount offered a hostile bid worth $108.4 billion to acquire Warner Bros. Discovery.