Warner Bros. Discovery (WBD) on Wednesday rejected Paramount Skydance’s takeover offer, choosing to stick with its signed agreement with Netflix, citing insufficient value and greater risks tied to the Paramount proposal.
“Your Board negotiated a merger with Netflix that maximises value while mitigating downside risks, and we unanimously believe the Netflix merger is in your best interest. We are focused on advancing the Netflix merger to deliver its compelling value to you,” the WBD board said in a letter to shareholders.
WBD has agreed to sell its studios and streaming assets to Netflix in a cash-and-stock deal valued at USD 27.75 per share. Paramount, meanwhile, has offered USD 30 per share in cash for the entire company.
In its letter, WBD highlighted the downside risk if a Paramount Skydance deal were to collapse. The board calculated that Warner would face liabilities totalling USD 4.7 billion, including a USD 2.8 billion termination fee owed to Netflix, a USD 1.5 billion fee for failing to complete a debt exchange, and incremental interest expenses of roughly USD 350 million. These costs would reduce the USD 5.8 billion termination fee payable by Paramount Skydance to just USD 1.1 billion in net proceeds in the event of a failed transaction.
By comparison, the Netflix agreement also carries a USD 5.8 billion breakup fee but “imposes none of these costs on WBD,” the board said, adding that “the risk-adjusted value of the Paramount offer is not superior to the Netflix merger.”
David Ellison-led Paramount Skydance has argued that its proposal faces fewer regulatory hurdles, with the deal expected to close within 12 to 18 months.
“Paramount has repeatedly demonstrated its commitment to acquiring WBD. Our USD 30 per share, fully financed all-cash offer was made on December 4 and continues to be the superior option to maximise value for WBD shareholders,” Ellison said in a statement last month.
WBD, however, said it sees “no material difference in the level of regulatory risk” between a deal with Netflix and one with Paramount.
Paramount Skydance has made six offers so far, turning hostile with the last two by taking them directly to WBD shareholders, who have until January 21 to tender their shares. Paramount has maintained that it has addressed all of WBD’s concerns. But, the WBD board rejected this claim on Wednesday.
“WBD continues to be of the view that PSKY is a litigious counterparty, which raises concerns regarding the likelihood that the offer (or any related merger agreement) will be completed on the terms proposed,” the company said in a regulatory filing.
For the unversed, the acquisition battle began in December 2025, when Netflix announced it had agreed to acquire Warner Bros.’ iconic assets, including its film and television studios, HBO Max and HBO. Emerging as the top bidder, Netflix sealed the transaction at a total enterprise value of approximately USD 82.7 billion, including an equity value of USD 72 billion. The deal was unanimously approved by the boards of directors of both Netflix and Warner Bros. Discovery (WBD) and was expected to close within 12 to 18 months.
However, opposition soon followed. The Writers Guild of America (WGA) joined a growing chorus of Hollywood labour and industry groups objecting to Netflix’s proposed USD 83 billion acquisition of WBD’s studios and streaming business. Even US President Donald Trump warned that the takeover could face regulatory hurdles, saying the combined company’s scale “could be a problem”.
Amid the rising resistance to Netflix’s acquisition deal, Paramount sent a rival offer directly to WBD shareholders to acquire the entire company, valuing it at a total enterprise value of USD 108.4 billion.
WBD, for its part, had said it would “carefully review and consider” Paramount’s proposal, while reiterating its preference for Netflix’s focus on premium content and streaming over exposure to traditional television businesses.
