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Warner Bros. Discovery Stands Firm Against Paramount’s Hostile Takeover Attempt
In a decisive move highlighting its strategic priorities, Warner Bros. Discovery (WBD) has officially turned down a staggering $108 billion takeover bid from Paramount Skydance, led by David Ellison. Characterizing the proposal as “illusory,” WBD expressed concerns that Paramount had provided misleading information regarding the financial support backing its offer.
In a letter addressed to its shareholders, WBD emphasized its commitment to honoring its prior agreement with Netflix, referring to Paramount’s claims of having a “full backstop” from the Ellison family as unfounded. “It does not, and never has,” the letter boldly asserted.
The board further suggested that Paramount’s proposal paled in comparison to the existing merger deal with Netflix, which offers $27.75 per share for WBD’s Hollywood studios and streaming operations. This Netflix agreement is portrayed as a solid commitment, promising enforceable terms with no dependency on equity financing alongside significant debt backing.
In response to this rejection, Netflix expressed satisfaction with WBD’s stance, reinforcing that their merger agreement is the more advantageous option for shareholders. Ted Sarandos, co-CEO of Netflix, stated that the board’s recommendation underscores the superior nature of their acquisition offer.
Looking ahead, Paramount and its investors, including tech billionaire Larry Ellison, will review WBD’s dismissal. Reports suggest they may consider adjusting their bid in light of this development, leaving the landscape of corporate takeovers in the entertainment industry rife with tension and anticipation.
As the situation unfolds, the rivalry between these media giants captures a crucial moment in today’s rapidly evolving entertainment landscape, revealing the complexities and stakes involved in high-stakes corporate maneuvering.
