According to exclusive information published by Bloomberg, Warner Bros Discovery is preparing to reject for a second time the acquisition offer submitted by Paramount Skydance. The decision is expected despite the fact that the rival company has made significant modifications to the original terms of its proposal, as confirmed by sources with knowledge of the internal negotiations.
Warner Bros: Critical board of directors meeting
Warner Bros Discovery’s board of directors has not yet finalized its decision, but is scheduled to convene an emergency meeting within the next week. According to the same sources cited by Bloomberg, the main reservation of company executives focuses on the financial size of the offer. Paramount has not increased the monetary amount of its proposal, which continues to lag significantly compared to the competitive offer submitted by Netflix.
Paramount’s public campaign and revisions
Paramount, which controls the historic studio of the same name as well as the MTV network, has launched an extensive public campaign to win support from shareholders and analysts for the Warner Bros acquisition, which has HBO and CNN in its portfolio. On December 8, the company officially announced a cash offer of $30 per share, just three days after Warner Bros accepted the agreement with Netflix, which exclusively concerns production and streaming activities.
Since then, Paramount has proceeded with two successive revisions of its original proposal. The most recent modification includes a personal guarantee from billionaire Larry Ellison, who commits to personally cover $40.4 billion in equity and related financing obligations.
The Ellisons’ vision for a new media giant
Control of Paramount belongs to Larry Ellison and his son, David Ellison, an experienced film producer who seeks to create a unified and powerful media entity. The Ellisons took over the company’s management in August and have since repeatedly submitted proposals to Warner Bros Discovery. Acquiring the company would add another classic Hollywood studio to their business portfolio and provide them with significantly greater scale in the streaming services sector.
Board of directors’ reservations
Despite repeated attempts, Warner Bros’ board of directors remains steadfast in its original position, demanding that Paramount offer substantially improved financial terms. Many company shareholders consider it obvious that a significantly higher monetary offer will be needed for the deal to proceed.
At the same time, the board expresses serious concerns regarding corporate debt management terms. Specifically, there are reservations that the proposed agreement with Paramount would limit Warner Bros’ ability to manage its debt autonomously without prior approval from the Ellisons. Additionally, it has not been clarified whether Paramount would assume payment of the compensation clause that Warner Bros would be obligated to pay Netflix in case of cancellation of the existing agreement.
Warner Bros’ position and Netflix’s superiority
In its official public announcements, Warner Bros emphasizes that Netflix’s offer is superior for multiple reasons. Among the arguments the company presents is the fact that Paramount would be burdened with higher corporate debt and plans extensive job cuts. Netflix maintains primacy as Hollywood’s most valuable company, with a market capitalization exceeding $400 billion, which provides it with a significant competitive advantage in negotiations.
