WBD Declines Paramount, Chooses Netflix Deal Again

• Paramount Skydance guaranteed backing from billionaire Larry Ellison but did not increase the financial terms of its bid despite WBD board's explicit instructions for improvements
• WBD's board cited 'many deficiencies' in Paramount's offer that are not present in the Netflix merger agreement, while Paramount has indicated its proposals are not yet 'best and final'
• Paramount first expressed interest in acquiring WBD in September and has made multiple offers both before and during the formal sale process

Warner Bros. Discovery Rejects Paramount Bid, Proceeds with Netflix Deal

Warner Bros. Discovery (WBD) has unanimously rejected another acquisition offer from Paramount Skydance, reaffirming its commitment to sell its streaming and studio business to Netflix instead. The WBD board called Paramount's bid "inferior" to the previously announced Netflix agreement.

Key Players and Background:

Paramount Skydance, led by CEO David Ellison, has been attempting to acquire all of WBD's assets, including its pay TV networks, since September. The hostile bid is backed by billionaire Larry Ellison, David's father and Oracle co-founder. However, Paramount has not increased the financial terms of its offer despite multiple requests from WBD's board.

Deal Structure:

While Paramount seeks to acquire WBD in its entirety, Netflix's agreement focuses specifically on WBD's streaming and studio operations. WBD initiated a formal sale process after Paramount's initial interest, inviting competing bidders.

Board Concerns:

WBD Chairman Samuel Di Piazza previously expressed concerns about Larry Ellison's financial backing. In late December, Paramount addressed these concerns by guaranteeing Ellison would not revoke the family trust or adversely transfer assets during the transaction. Despite this assurance, Paramount failed to improve other aspects of its proposal.

Board Statement:

The WBD board criticized Paramount for "repeatedly failing to submit the best proposal," stating that despite extensive engagement and explicit instructions for improvement, Paramount's offers still contain "many deficiencies" absent from the Netflix merger agreement. Paramount has indicated its offers don't represent its "best and final" proposal.

Market Impact:

This decision signals WBD's strategic preference for divesting specific assets rather than a complete acquisition, potentially reshaping the streaming entertainment landscape.