The battle for control of Warner Bros. Discovery (WBD) and its vast portfolio of popular entertainment IP, including "Harry Potter," "Game of Thrones," and the DC Comics series, continues to intensify. The company announced on Wednesday that its board of directors had unanimously rejected a revised, $108.4 billion takeover offer from Paramount's Skydance Media, explicitly labeling the proposal a "leveraged buyout" that would saddle the company with a massive $87 billion in debt. In a letter to shareholders, Warner Bros. Discovery urged them to reject the aforementioned offer. The letter stated that the "extremely high" level of debt Paramount would need to raise to fund the deal would significantly increase the risk of the transaction falling through; concurrently, the company advised shareholders to vote in favor of the previously announced $82.7 billion deal to acquire film and television studio assets from Netflix. Even before the Netflix acquisition agreement was officially announced, market rumors had suggested Paramount's interest in acquiring Warner Bros. Discovery. Following the WBD board's decision to accept the Netflix deal, Paramount directly presented an all-cash takeover offer of $30 per share to WBD shareholders in early December. However, this offer was promptly rejected by Warner Bros. Discovery, which called the bid "unrealistic," pointed out that Paramount lacked sufficient cash to support its acquisition claim, and once again recommended shareholders opt for Netflix's "cash + stock" acquisition proposal. To advance the acquisition, Paramount subsequently presented a $40 billion guarantee provided by David Ellison's father—Oracle co-founder and billionaire Larry Ellison—and stated it would finance the transaction by raising $54 billion in debt. But Warner Bros. Discovery remained unmoved. The company stated in a declaration: "Paramount is an enterprise with a market capitalization of only $14 billion, yet it is attempting to initiate an acquisition requiring $94.65 billion in debt and equity financing—a sum nearly seven times its own total market value... Compared to the conventional transaction structure of merging with Netflix, this aggressive deal framework presents significantly higher risks for Warner Bros. Discovery and its shareholders." Warner Bros. Discovery also raised doubts about Paramount's operational capabilities post-acquisition, stating that raising such an enormous debt burden would further deteriorate Paramount's current "junk-level" credit rating. The company expressed particular concern about Paramount's existing negative free cash flow—a situation that any acquisition would exacerbate. Warner Bros. Discovery emphasized in its statement: "In contrast, Netflix is a company with a market capitalization of approximately $400 billion, possessing an investment-grade balance sheet, an A/A3 credit rating, and is projected to generate over $12 billion in free cash flow by 2026." Netflix welcomed Warner Bros. Discovery's decision, noting that the merged entities would "integrate highly complementary strengths and develop together, united by a shared passion for storytelling."
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