The rejection marks the second time WBD’s board has dismissed Paramount’s proposal, citing financial instability and execution risks.
TL;DR
- Warner Bros. Discovery’s board unanimously rejected Paramount Skydance’s revised $108.4 billion bid.
- The board labeled Paramount’s proposal a risky leveraged buyout that lacks closing certainty.
- WBD reaffirmed that its ongoing $82.7 billion cash-and-stock deal with Netflix remains the superior path forward.
- Paramount’s offer relied heavily on debt financing, raising concerns about shareholder risk.
A Renewed Rejection
On January 7, 2026, Warner Bros. Discovery’s Board of Directors issued a formal statement recommending that shareholders reject Paramount Skydance’s amended tender offer, which valued WBD at approximately $108.4 billion, or $30 per share.
According to the board, the revised bid, while larger than the earlier proposal, posed unacceptable levels of financial risk and was substantially inferior to the Netflix merger agreement. The deal, they said, would rely on a high-risk leveraged buyout structure and leave the merged company burdened with massive debt.
"The Board unanimously determined that the Paramount's latest offer remains inferior to our merger agreement with Netflix across multiple key areas," said Samuel A. Di Piazza, Jr., Chair of the Warner Bros. Discovery Board of Directors.
"Paramount's offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed. Our binding agreement with Netflix will offer superior value at greater levels of certainty, without the significant risks and costs Paramount's offer would impose on our shareholders."
Netflix Offer Seen as ‘Superior’
The board reaffirmed its full support for the Netflix acquisition agreement announced earlier in 2025. That transaction, valued at roughly $82.7 billion in total enterprise value, consists of both cash and stock, allowing WBD shareholders to benefit from Netflix’s continued market growth and strong credit profile.
Under the terms of that deal, Netflix will acquire WBD’s film and television studios—including HBO, Warner Bros. Pictures, and DC Studios—while leaving out the company’s legacy cable networks.
“The WBD Board remains fully supportive of and continues to recommend Netflix’s merger agreement, recognizing it as the superior proposal that will deliver the greatest value to its stockholders, as well as consumers, creators and the broader entertainment industry,” said Ted Sarandos and Greg Peters, co-CEOs of Netflix.
“Netflix and Warner Bros. will bring together highly complementary strengths and a shared passion for storytelling. By joining forces, we will offer audiences even more of the series and films they love—at home and in theaters—expand opportunities for creators, and help foster a dynamic, competitive, and thriving entertainment industry.”
WBD’s management also cited Netflix’s "market capitalization of approximately $400 billion, an investment grade balance sheet" as providing a higher degree of certainty and a more stable platform for long-term shareholder value creation.
Paramount’s Debt-Heavy Bid
Paramount Skydance’s revised offer included significant backing from billionaire Larry Ellison, private equity firm RedBird Capital, and a consortium of lenders, including Bank of America, Citi, and Apollo Global Management. The structure reportedly included more than $50 billion in debt commitments.
Despite these additions, WBD deemed the offer overleveraged and unlikely to secure regulatory or financing approval. Analysts noted that the transaction’s funding plan would have left the new company with one of the highest debt-to-equity ratios in the media industry.
Topics For More Insights
Paramount Skydance Offers WBD $108.4 Billion To Snub Netflix’s $72 Billion Bid
Netflix Plans 17-Day Theatrical Window For Warner Bros Movies
Warner Bros Chooses Netflix's Offer Over Paramount's Deal!
Netflix Shuts Boss Fight Game Studio As It Bets On GenAI Amid Wavering Shares
What Comes Next
WBD has urged shareholders not to tender their shares to Paramount. The company continues to advance toward closing its merger with Netflix, which remains subject to regulatory review in the United States and the European Union. The deal is expected to close by the third quarter of 2026.
Paramount, meanwhile, has not ruled out a third attempt, though its options are narrowing. Analysts suggest that Paramount may consider legal or proxy challenges to pressure WBD’s board, but such measures would face significant hurdles given the board’s unanimous stance.
For now, the focus remains on Netflix’s planned integration of Warner Bros.’ extensive intellectual property portfolio, which could reshape the competitive landscape of global streaming and entertainment.
What do you think about Warner Bros. Discovery’s decision to favor Netflix over Paramount’s higher-valued bid?
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