Overview
- Warner Bros. Discovery’s board unanimously urged shareholders to reject Paramount Skydance’s revised hostile offer in a letter filed with the SEC.
- Paramount is offering $30 per share (about $108.4 billion) backed by a $40.4 billion personal guarantee from Larry Ellison and large bank debt commitments, while Netflix agreed to pay $27.75 per share in cash and stock for the studios and streaming assets.
- The board quantified switch-and-fail costs at roughly $4.7 billion, including a $2.8 billion termination fee to Netflix, $1.5 billion tied to a debt exchange not closing, and about $350 million of added interest, which would shrink net proceeds from Paramount’s breakup fee to about $1.1 billion.
- Directors criticized Paramount’s structure as highly leveraged, citing extraordinary incremental debt—reported as potentially reaching tens of billions of dollars—versus what they describe as greater certainty under the Netflix transaction.
- WBD emphasized the standalone value of a planned cable spin-off, Discovery Global, which Paramount has valued at about $1 per share, and noted that Paramount could raise its bid, withdraw, or seek a shareholder vote as both potential deals face intensive antitrust scrutiny.