Warner Bros. Discovery has once again turned down a takeover offer from Paramount Skydance, choosing instead to move ahead with its planned deal with Netflix.
The decision was announced on Wednesday, with the WBD board unanimously advising shareholders to reject Paramount’s renewed approach, describing it as weaker than the Netflix agreement.
WBD recently agreed to sell its studio and streaming businesses to Netflix in a deal valued at about 72 billion dollars. Paramount, backed by Skydance Media, has been seeking to acquire the entire Warner Bros. Discovery group, including its pay TV networks.
Speaking on CNBC, WBD board chairman Samuel Di Piazza said the Netflix deal offers more certainty and value.
“We have a signed merger agreement with Netflix, it’s a compelling value, a clear path to closing and protections for our shareholders if something stops the close, whatever that might be,” Di Piazza said.
After the Netflix deal was announced, Paramount took its offer directly to shareholders with a hostile bid of 30 dollars per share, all cash, for the whole of WBD. The board rejected the offer at the time, and has maintained that position despite Paramount’s latest move.
In late December, Paramount sought to strengthen its bid by confirming financial backing from billionaire Larry Ellison, father of Skydance chief executive David Ellison. However, the company did not increase the value of its offer.
In a letter to shareholders on Wednesday, the WBD board said Paramount had repeatedly failed to address key concerns.
“PSKY has repeatedly failed to submit the best proposal for WBD shareholders despite clear direction from WBD on both the deficiencies and potential solutions,” the board said.
It added that despite detailed engagement and guidance, Paramount’s offers still contained problems not found in the Netflix agreement.
Meanwhile, a major shareholder has openly criticised the board’s stance. Pentwater Capital Management chief executive Matthew Halbower, whose firm is WBD’s seventh-largest shareholder, said the board should at least engage with Paramount.
“Paramount has offered a 30 dollars per share that is economically superior,” Halbower said. “I understand the board has some legitimate issues with it, but those issues don’t warrant refusing to actually have a conversation.”
He warned that rejecting Paramount outright could amount to a missed opportunity, arguing that the board may be failing in its duty to shareholders.
Netflix, on its part, welcomed WBD’s continued support for the deal, noting that regulatory discussions were already underway.
“The WBD Board remains fully supportive of and continues to recommend Netflix’s merger agreement, recognising it as the superior proposal that will deliver the greatest value to its stockholders,” Netflix co-chief executives Ted Sarandos and Greg Peters said.
The proposed Netflix deal is still subject to regulatory approval in the United States and Europe, while Paramount has yet to indicate whether it will make another offer for Warner Bros. Discovery.
