Warner Bros. Stock Falls After Hours As Report Reveals Board Is Set To Choose Netflix Deal Over Paramount

• Affinity Partners reportedly stepped away, removing about $200 million of equity backing from Paramount’s offer.
• Warner is supposedly set to oppose the bid and plans to urge shareholders to support the existing Netflix deal instead.
• The takeover fight remains unresolved, with regulatory scrutiny and financing risks still hanging over both proposals.

Warner Bros. Discovery shares fell 1.2% in after-hours trading on Tuesday after a report said the company is preparing to urge shareholders to reject Paramount Skydance’s takeover offer and instead back its existing deal with Netflix.

Board Prepares To Back Netflix Deal

Warner Bros. Discovery is expected to recommend as soon as Wednesday that investors turn down Paramount’s bid in favor of the Netflix agreement, according to a report by The Wall Street Journal. 

The report came as Jared Kushner’s private equity firm, Affinity Partners, confirmed it has exited Paramount’s hostile bid, saying the dynamics of the investment had changed since it became involved in October. Affinity said it still believes Paramount’s proposal has strong strategic rationale but chose not to continue pursuing the opportunity, Bloomberg reported. 

Bloomberg previously said Affinity’s equity commitment to the bid was about $200 million.

Paramount’s $30 Bid Under Pressure

Affinity’s exit adds pressure to David Ellison-led Paramount, which last week launched a $30-per-share hostile bid for Warner Bros. Discovery. The offer came days after Warner accepted Netflix’s roughly $72 billion deal for its studios and streaming assets.

Paramount has argued its bid delivers superior value and stands a better chance of clearing regulations. In an open letter sent to Warner shareholders, Ellison urged investors to tender their shares, saying it was “not too late” to realize the benefits of Paramount’s proposal.

Netflix Deal Faces Growing Scrutiny

Netflix’s agreement has drawn increased attention from both investors and politicians. U.S. President Donald Trump has inserted himself into the debate, suggesting the deal should include CNN and signaling he plans to weigh in on the approval process.

Investor focus has also turned to the financing behind Netflix’s offer, which includes roughly $59 billion in unsecured bridge loans from Wells Fargo, BNP Paribas and HSBC, making it one of the largest loans of its kind.

Morgan Stanley analysts have flagged the size of the debt as a potential risk, recommending selling certain Netflix notes due to the likelihood of increased leverage and possible credit-rating pressure. Others, including Moody’s, have said the debt appears manageable for now.

Whichever bidder ultimately prevails, the deal is expected to face an extensive regulatory review, a process that could delay a final closing by as much as two years.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment was mixed across the deal players. Warner Bros. Discovery showed ‘neutral’ sentiment with ‘normal’ message volume, Paramount Skydance saw ‘bearish’ sentiment amid ‘low’ activity, while Netflix stood out with ‘bullish’ sentiment and ‘high’ message volume.

One user said they added to their Netflix position following reports that Warner Bros. Discovery plans to reject Paramount’s bid, expressing confidence in the deal moving forward.

Another user questioned whether reports of Warner Bros. Discovery rejecting Paramount’s offer would be bullish or bearish for Netflix, noting that the stock had fallen the last time acquisition news surfaced.

So far this year, Warner Bros. Discovery is up 173%, Paramount Skydance has gained 33%, while Netflix is up about 6%.

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

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