Warner Bros Set to Reject Paramount’s $108.4B Hostile Bid Despite Larry Ellison’s Guarantee: Report

• The board remains unconvinced the revised Paramount offer improves on the certainty of the Netflix deal.
• Concerns persist around debt control, financing terms, and exposure to a potential breakup fee.
• Regulatory and political risks tied to further media consolidation continue to weigh on the proposal.

Warner Bros Discovery (WBD) is reportedly expected to turn down Paramount Skydance's (PSKY) $108.4 billion hostile bid. 

Board Meeting Looms 

The Warner Bros. board has not made a final determination but is expected to meet next week to discuss the offer, Bloomberg reported, citing people familiar with the matter.

The rejection is reportedly expected despite Paramount amending its bid twice, most recently adding Oracle co-founder Larry Ellison’s personal guarantee of $40.4 billion in equity financing and other commitments.

Paramount’s $30-per-share all-cash offer was made public on Dec. 8, three days after Warner Bros. agreed to a deal with Netflix that covers only its studio and streaming businesses, not the full company.

Paramount’s Offer

Earlier this month, Paramount Skydance made a $30 per share all-cash bid for Warner Bros to compete with Netflix’s offer. Later, the company also roped in Ellison, who agreed to provide an irrevocable personal guarantee of $40.4 billion of the equity financing for the offer.

Meanwhile, Netflix’s deal to acquire Warner Bros. was valued at $27.75 per share, at a total enterprise value of about $82.7 billion.

While Paramount has called its hostile bid superior to that of Netflix’s, the Warner Bros’ board has been partial to the Netflix offer. The board sees Paramount’s offer carrying significant risks, including the fact that Paramount’s bid is not fully backstopped by the Ellison family, and believes the Netflix offer would deliver more “certain” value for its shareholders. 

The Warner Bros board is also reportedly concerned that a Paramount deal would limit Warner Bros.’ ability to manage its debt without Ellison-family approval and that Paramount has not guaranteed it would cover the breakup fee Warner Bros. would owe Netflix.

Meanwhile, a Paramount-Warner Bros. deal has also garnered flak from lawmakers in the country who have expressed concerns about further consolidation in the media industry as well as about national security. 

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around WBD shares remained in the ‘bearish’ territory over the past day, while message levels were at ‘extremely low’ levels at the time of writing.

Retail sentiment around PSKY shares and NFLX shares were also in the ‘bearish’ territory over the past day amid ‘extremely low’ message levels. 

WBD stock is up 175% in the past year. PSKY stock is up nearly 15% while NFLX stock climbed over 3% in the same period. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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