Warner Bros. Discovery Board Urges Shareholders to Reject Paramount Bid in Favor of Netflix Merger

Overview

• Warner’s board said Paramount Skydance’s revised $30-per-share cash offer provides insufficient value and leaves doubt about the bidder’s ability to close.
• Larry Ellison guaranteed $40.4 billion in equity to support the Paramount proposal, which Warner says would still require more than $50 billion of debt, making completion riskier.
• Abandoning the Netflix agreement would cost about $4.7 billion, including a $2.8 billion breakup fee to Netflix, a $1.5 billion debt-exchange termination charge, and roughly $350 million in financing expenses.
• Warner said the Paramount term sheet imposes restrictive pre-closing limits, including a cap on technology infrastructure contracts above $30 million per year that could hinder operations for 12 to 18 months.
• The board maintains the Netflix merger with a cable-network spinoff offers greater value, and shareholders reportedly have until Jan. 21 to decide on the rival cash offer, with the window subject to extension.