Warner Bros Discovery (WBD) has formally advised its shareholders to reject a colossal $108.4 billion hostile takeover offer from Paramount Skydance, labelling the bid as "inadequate" and fraught with risk. This dramatic move intensifies an extraordinary corporate struggle for control of one of Hollywood's most storied media empires.
The Netflix Deal and Paramount's Counter-Strike
The battle erupted earlier this month when WBD agreed to sell its legendary movie studios, the HBO cable network, and its streaming service to Netflix in a monumental $82.7 billion transaction. This deal promised to radically reshape the entertainment industry's competitive landscape.
However, Paramount Skydance, controlled by the billionaire Ellison family, swiftly launched a counter-offensive. Having previously made private bids for WBD, Paramount unveiled an all-cash tender offer to acquire the entire company, including the CNN news network, and vowed to take the proposal directly to WBD shareholders, bypassing the board.
Board Rejects Offer as 'Inadequate'
In a firm statement released on Wednesday morning, WBD's board unanimously recommended shareholders spurn the Paramount approach. Samuel A Di Piazza Jr, Chairman of the WBD board, stated the offer failed to provide sufficient value while imposing significant risks.
"Following a careful evaluation of Paramount’s recently launched tender offer, the Board concluded that the offer’s value is inadequate, with significant risks and costs imposed on our shareholders," Di Piazza said. "This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement."
The board expressed confidence that the pending merger with Netflix delivers superior and more certain value for its investors, urging them to support that path forward.
Funding Questions and Political Dimensions
The Paramount bid immediately faced scrutiny over its financing. Regulatory filings revealed the offer was backed by external funders, including:
- Affinity Partners, an investment fund founded by Donald Trump's son-in-law, Jared Kushner.
- Saudi Arabia's Public Investment Fund (PIF).
- The Qatar Investment Authority (QIA).
On Tuesday, it emerged that Kushner's Affinity Partners had subsequently stepped back from the financing consortium, adding another layer of uncertainty to the proposal's viability.
The takeover tussle has also drawn direct commentary from former US President Donald Trump, who stated he plans to be involved in any regulatory approval process. He singled out the future of CNN, a network he has long criticised, as a pivotal issue. "I think CNN should be sold, because I think the people that are running CNN right now are either corrupt or incompetent," Trump said last week.
The outcome of this high-stakes corporate clash will have profound implications for the global media landscape, determining the fate of iconic brands like Warner Bros, HBO, and CNN. Shareholders now face a critical choice between two divergent futures for the company.
