Warner Bros Urges Shareholders To Reject Paramount’s $108bn Attempt To Hijack Netflix Deal

Warner Bros Discovery has advised its shareholders to vote against a $108.4bn (£80.75bn) takeover bid by Paramount Skydance, insisting that the proposal undermines an existing agreement with Netflix and carries significant risks.

Paramount Skydance has described its offer as “superior” to the roughly $72bn deal Warner Bros struck with Netflix, covering its film and streaming operations.

However, Warner Bros Discovery’s board said it had unanimously concluded that the Netflix transaction is in the company’s best long-term interests.

In a major twist in the battle for control of one of Hollywood’s most historic studios, the board formally recommended that shareholders reject the Paramount bid, arguing that the Netflix deal provides greater certainty and value.

Warner Bros Discovery put itself up for sale in October after receiving “multiple” expressions of interest from potential buyers, including Paramount Skydance. On December 5, the company announced it had reached an agreement to sell its film and streaming businesses to Netflix.

In a detailed legal filing, the board said Paramount’s higher offer comes with “numerous and significant risks,” and dismissed claims that the bid is being financially underwritten by the Ellison family, one of the wealthiest families in the United States.

The filing added that Netflix’s proposal is fully financed and better reflects the current balance of power in the global entertainment industry.

Despite the board’s position, the takeover drama may not yet be over. Paramount could return with a revised bid, prolonging a saga that has already sent shockwaves through Hollywood.

A week after Warner Bros announced the Netflix agreement, Paramount Skydance launched a fresh offer for the entire company, including its television networks. Paramount is backed by the billionaire Ellison family, which has close ties to the president.

Any takeover of Warner Bros is expected to face intense scrutiny from competition regulators in both the United States and Europe.

Control of the studio would give any buyer a major advantage in the fiercely competitive streaming market, granting access to a vast catalogue of films and television shows, including Harry Potter, the MonsterVerse, Friends and the HBO Max streaming service.

The prospect of a merger has also drawn criticism from within the industry. The Writers Guild of America’s East and West branches have called for any such deal to be blocked, warning it could lead to job losses, lower wages and a reduction in the volume of content available to viewers. For now, Warner Bros Discovery is standing firm behind Netflix.