Warner Bros. Discovery, the parent company of HBO and CNN, is advising shareholders to reject an unsolicited acquisition offer from Paramount Skydance, reaffirming its commitment to an existing deal with streaming giant Netflix. The company dismissed Paramount's proposal as "inferior" and "insufficient."
Paramount, which owns CBS and Nickelodeon, made a direct bid to Warner Bros. shareholders for the entire company after Warner's board agreed to sell its streaming and production assets to Netflix. Warner Bros. plans to spin off its cable networks, including CNN and TNT, into a separate entity before finalizing the Netflix transaction.
Backed by software billionaire Larry Ellison and his son David, Paramount is competing with Netflix—the world's most valuable entertainment company—to acquire Warner Bros., one of Hollywood's most iconic studios and owner of premium TV assets like HBO. Both Paramount and Netflix executives claim their bids would better leverage Warner's coveted content library to boost their respective streaming platforms.
However, Warner's board raised multiple concerns about Paramount's offer, citing financing uncertainties and the risk of deal termination. Paramount proposed a $30-per-share all-cash bid for the entire company, including cable networks. In contrast, the Netflix deal offers $27.75 per share in cash and Netflix stock, plus equity in a new entity holding Warner's cable assets.
The board stated Paramount's proposal "remains inferior to the Netflix merger," unanimously recommending shareholders approve the Netflix agreement, which it called "superior" while labeling Paramount's bid as "value-deficient with significant risks and costs."
Netflix separately sent a letter to Warner shareholders Wednesday morning reiterating the advantages of its offer and urging approval.
In premarket trading, Warner Bros. shares fell 1.1% to $28.59, while Netflix gained 1.4% and Paramount declined 1.8%.
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