Warner Bros. Discovery Inc. (WBD.US) is reportedly planning to once again reject a revised acquisition proposal from Paramount Skydance Corp (PSKY.US), following modifications made by the rival media company to its offer terms. Sources indicate that the Warner Bros. board has not yet made a final decision but is scheduled to meet next week to deliberate. A key concern for the board is that Paramount has not increased its financial offer, which Warner Bros. had previously rejected as inferior to a proposal from streaming giant Netflix (NFLX.US). Paramount, which owns the eponymous film studio and MTV, has launched a public campaign to garner support for its bid to acquire Warner Bros., the parent company of HBO and CNN. On December 8th, Paramount publicly submitted a cash offer of $30 per share, just three days after Warner Bros. had accepted a deal from Netflix that involved the latter acquiring only Warner Bros.' studio and streaming assets. Since then, Paramount has revised its offer twice, with the most recent amendment including a guarantee from Oracle founder Larry Ellison that he would personally backstop $40.4 billion in equity financing and other commitments. Controlled by Larry Ellison and his son David Ellison, a film producer building a media empire, Paramount has repeatedly submitted offers to Warner Bros. since the Ellisons gained control in August, aiming to add another legacy Hollywood studio to their smaller company and achieve greater scale in the streaming arena. According to insiders, the Warner Bros. board remains unconvinced and is waiting for Paramount to improve the financial terms of its bid, with several shareholders expressing expectations for a sweeter offer. The board also harbors concerns that a deal with Paramount could restrict Warner Bros.' ability to manage its own debt without approval from the Ellisons and that Paramount has not guaranteed covering the breakup fee Warner Bros. would owe to Netflix. Warner Bros. has argued in public filings that it considers Netflix's offer superior for multiple reasons, including the heavy debt load Paramount would carry and its plans for more significant job cuts. Netflix, as Hollywood's highest-valued company with a market capitalization exceeding $400 billion, presents a starkly different proposition.
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