Warner Bros. Discovery, Inc. (NASDAQ: WBD) today announced that its Board of Directors has unanimously determined that the tender offer from Paramount Skydance (NASDAQ: PSKY) is not in the best interests of the company and its shareholders. The Board strongly recommends that shareholders reject the Paramount offer and support the previously announced merger agreement with Netflix, which provides superior value and certainty.
The Board's decision follows a thorough review of Paramount's $108 billion hostile takeover bid, launched on December 8, 2025. This offer was deemed inadequate in value and fraught with significant risks, including uncertain financing commitments, potential regulatory hurdles, and additional costs to Warner Bros. Discovery shareholders.
"After careful evaluation, our Board is confident that the Netflix merger delivers the best outcome for our shareholders," said Samuel A. Di Piazza, Jr., Chair of the Warner Bros. Discovery Board of Directors.
"Paramount's proposal fails to address key concerns we've raised repeatedly, including the lack of a solid equity backstop from the Ellison family and illusory terms that could be amended or terminated at any time. In contrast, the Netflix combination offers compelling, certain value through a mix of cash, Netflix stock, and participation in future upside from Discovery Global."
Under the terms of the Netflix merger, announced on December 5, 2025, Warner Bros. Discovery shareholders will receive $23.25 in cash per share, plus $4.50 in Netflix common stock (subject to a collar), and shares in Discovery Global, a new entity encompassing certain WBD assets.
This structure is backed by Netflix's robust financial position, with no equity financing required and a $5.8 billion regulatory termination fee – higher than Paramount's proposed $5 billion fee.
Despite claims, there is no direct commitment from the Ellison family. Instead, it relies on an opaque, revocable trust with capped liability, posing risks to deal completion. Paramount anticipates $9 billion in synergies, but this would result in a leveraged structure (6.8x 2026E debt to EBITDA) vulnerable to market changes.
The offer can be amended or terminated by Paramount at any time, lacking the binding commitments of the Netflix agreement. Accepting Paramount's bid could trigger a $2.8 billion termination fee to Netflix and $1.5 billion in financing costs, equating to about $1.66 per share borne by shareholders if the deal fails.
The Board's strategic review process, initiated in October 2025, was comprehensive and competitive, involving engagement with multiple parties, including six proposals from Paramount. Despite repeated feedback, Paramount did not present a superior alternative.
The Board believes regulatory risks are comparable between the two proposals, with both expected to secure necessary approvals within 12-18 months.