Warner Bros. rejects Paramount's $170 billion acquisition offer, upholding its agreement with Netflix, saying 'Paramount's proposal lacks the funds and substance to support it.'
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The Warner Bros. Discovery (WBD) board of directors unanimously voted again to reject Paramount Skydance's $108 billion (approximately 17 trillion yen) hostile takeover bid and maintain its existing agreement with Netflix. The board criticized the proposal as a ' leveraged buyout ' that would impose $87 billion (approximately 13.7 trillion yen) on the company, and reportedly urged shareholders to reject it due to the high risk that the deal would not go through.
Warner Bros rejects revised Paramount bid, sticks with Netflix | Reuters
https://www.reuters.com/legal/transactional/warner-bros-rejects-revised-paramount-bid-risky-leveraged-buyout-2026-01-07/
Warner Bros. Discovery rejects Paramount's bid again, calls it a 'leveraged buyout' | TechCrunch
https://techcrunch.com/2026/01/07/warner-bros-discovery-rejects-paramounts-bid-again-calls-it-a-leveraged-buyout/
Warner Bros. sticks with Netflix merger, calls Paramount's $108B bid “illusory” - Ars Technica
https://arstechnica.com/tech-policy/2026/01/warner-bros-sticks-with-netflix-merger-calls-paramounts-108b-bid-illusory/
On December 5, 2025, Netflix announced that it had entered into a definitive agreement to acquire WBD's film and television production and streaming businesses.
Netflix signs final deal to acquire Warner Bros. - GIGAZINE
Following this announcement, it was revealed that Paramount Skydance had launched a hostile takeover bid for all of WBD's businesses, exceeding Netflix's offer.
Paramount launches hostile takeover of Warner Bros. Discovery, all businesses together worth approximately 17 trillion yen - GIGAZINE
Paramount had initially considered an acquisition before the Netflix deal was announced, making a direct proposal to shareholders offering $30 (approximately 4,700 yen) per share in cash in early December 2025. WBD, however, reportedly rejected Paramount's proposal, calling it 'illusory and insufficiently funded,' and instead opted for a cash-and-stock deal with Netflix.
Paramount subsequently proposed amendments, including a $40.4 billion personal guarantee from Oracle co-founder Larry Ellison and $54 billion in debt financing, but these did not satisfy WBD's concerns.
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WBD cited financial uncertainty as the primary reason for rejecting Paramount's proposal, pointing out that a structure requiring Paramount to raise more than $94 billion, a company valued at only $14 billion, poses significant risks to shareholders.
Additionally, given Paramount's speculative credit rating and negative free cash flow, there were concerns that taking on a large amount of debt would further worsen its financial situation and jeopardize the completion of the transaction.
by Antonio Longo
Meanwhile, Netflix has a market capitalization of approximately $400 billion (approximately ¥62.8 trillion) and maintains an A/A3 investment-grade credit rating. Its free cash flow is expected to exceed $12 billion (approximately ¥1.88 trillion) by 2026. Another barrier is that if WBD were to terminate its contract with Netflix and switch to Paramount, it would be required to pay a $2.8 billion cancellation fee to Netflix, which, including other costs, would result in an additional $4.7 billion (approximately ¥738 billion).
Furthermore, WBD had planned to spin off its cable television network division, Discovery Global, but Paramount's proposal restricted this. WBD's board of directors argued that 'spinning off the cable television network business into a separate company would allow each entity to focus on its own strategy and bring significant benefits to shareholders.' Therefore, Paramount's proposal, which called for the cancellation of the spinoff plan and the purchase of the entire company, was not acceptable. Meanwhile, Netflix's acquisition was limited to the film and production business and the streaming business, and was contingent on the implementation of the cable television network spinoff plan.
However, some investors, including Pentwater Capital Management, the seventh-largest shareholder, have criticized the board's refusal to negotiate with Paramount, arguing that it violates its fiduciary duty, and are calling for further discussions. On the regulatory front, Netflix has begun discussions with the US Department of Justice and the European Commission, and the transaction is expected to take 12 to 18 months to complete.
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