Warner Bros. Discovery Advises Shareholders to Prefer Netflix Over Paramount Offer
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Warner Bros. Discovery remains uninterested in the proposition from Paramount Skydance.
In a recent statement, Samuel Di Piazza, the chairperson of Warner Bros. Discovery's board, highlighted that Paramount's offer is "not adequate and presents significant dangers and expenses to our investors," when compared to Netflix's proposal, which offers a "more advantageous and dependable benefit for our stakeholders."
The board, addressing shareholders, advocated against accepting Paramount's all-cash offer of $30 per share. Instead, they endorsed Netflix's bid, which proposes $27.75 per share and focuses on acquiring Warner's studio assets, HBO, and HBO Max. Unlike Paramount's interest in purchasing the entire company, including networks like CNN, Netflix's offer does not target these television outlets.
Di Piazza mentioned that Paramount's seventh proposal still does not satisfy expressed concerns, especially those related to financing.
Paramount claims their proposal is fully backed by Larry Ellison, one of the wealthiest individuals worldwide and father of the Paramount CEO. However, the Warner team noted that this guarantee is reliant on an "obscure and unverified revocable trust," without transparency on its holdings or liabilities.
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Conversely, Netflix is offering its compensation through a mix of cash and stock. Despite a recent drop, Netflix's stock experienced a remarkable rise of over 600% from mid-2022 to mid-2025. The company's market worth exceeds $400 billion.
Even though Paramount claims it would navigate the regulatory landscape more smoothly than Netflix, Warner Bros. Discovery believes "there is no substantial variance in regulatory risks" between the bids.
While the Ellison family maintains a close relationship with executive figures, Netflix’s co-CEO Ted Sarandos has earned notable admiration for his handling of the offer. In past discussions, influential political figures have recognized Sarandos, although they have remained neutral publicly regarding the merger decision.
The board reassures investors that they have "consistently interacted" with all interested parties, among them the Ellisons. Reports indicate that the communication between Warner Bros. and David Ellison became minimal in the final stages of negotiations.
Even Paramount might have anticipated Warner's choice to move forward with Netflix.
Last week, it emerged that Paramount remarked on WBD's leadership accepting their proposal "as is today" could imply breaching fiduciary responsibilities, as highlighted by Business Insider's earlier coverage.
This situation arises because Paramount's $30-per-share aggressive proposal closely replicates its former offer to WBD. Companies publicly held are required to prioritize shareholder interests. Thus, any reversal from Warner Bros.' board could result in prevailing shareholder lawsuits.
Following Paramount's forceful offer, Warner Bros. stated their intent to "meticulously evaluate and consider the Paramount Skydance proposition" within the framework of their fiduciary responsibilities and in alignment with their independent advisory partners.
Given Warner Bros. Discovery's decision to decline Paramount again, the next strategic maneuver lies with Paramount.
According to sources, Paramount communicated to CEO David Zaslav an indication that the recent offer wasn’t their "definitive and ultimate" one. This leaves speculation open as to whether Paramount is willing to heighten its offer.
Failing further proposals, Warner's shareholders have a January 8 deadline to decide on Paramount's offer, although this period might be extended. If Warner's investors pivot towards Paramount, the company would owe Netflix a costly $2.8 billion for terminating their agreement.
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