Warner Bros. Discovery has again advised shareholders to reject a takeover proposal from Paramount Skydance, saying the revised offer would expose the company to excessive leverage and material deal-execution risks.
In an updated securities filing released on Wednesday, alongside a letter addressed to investors, Warner Bros said its board had reviewed Paramount’s amended $108.4 billion hostile bid and concluded that it remained less attractive than a previously agreed cash-and-stock transaction involving Netflix, which would see the streaming giant acquire certain Warner Bros assets.
The company said its board convened on January 6 to evaluate Paramount’s latest proposal and unanimously reaffirmed its December recommendation that shareholders favor the Netflix deal, valued at $82.7 billion. While the board acknowledged some changes in the revised Paramount offer, it said key risks remained unresolved.
Warner Bros highlighted concerns over leverage, noting that Paramount’s proposal would require assuming roughly $54 billion in debt, including about $33 billion of Warner Bros’ existing borrowings at the time of completion.
The board also flagged unresolved contractual issues, including Paramount’s refusal to cover the $2.8 billion breakup fee payable to Netflix if Warner Bros were to exit that agreement, as well as restrictive covenants that could limit the company’s ability to refinance debt.
While the amended Paramount bid includes improvements—such as adjustments to the equity financing structure, a personal guarantee from billionaire Larry Ellison, and an increased $5.8 billion reverse termination fee if the deal fails—the board said these changes did not eliminate what it described as long-standing deficiencies. Paramount has also not stated that its latest proposal represents a final offer or raised its bid.
To manage ongoing evaluations, Warner Bros said it has formed a four-member ad hoc transaction committee to oversee negotiations with both bidders, with final approval authority remaining with the full board.
according to a Reuters report
