Warner Bros Discovery is expected to urge its shareholders to reject Paramount’s $108 billion hostile takeover attempt, paving the way for Netflix to move forward with its own bid to acquire the Hollywood studio and streaming company.
A decision from WBD’s board could come as soon as this week after Paramount Skydance—led by David Ellison and financed by his billionaire father, Larry Ellison (founder of Oracle)—decided to bypass management and present its rival offer directly to shareholders nearly two weeks ago.
Netflix initially emerged as the frontrunner with an $82.7 billion bid, securing control of prized assets such as the Harry Potter and DC Comics franchises, along with HBO and its acclaimed series like Game of Thrones, The White Lotus, and Succession. The deal excludes WBD’s cable assets, including CNN, TBS, and TNT, which are planned to spin off into a separate company next year.
Although Paramount has submitted a higher all-cash proposal for the entirety of WBD’s assets, reports indicate the board questions the deal’s structure and financing, particularly because it relies on the Ellison family trust—valued at roughly $250 billion in Oracle stock—rather than direct personal backing from Larry Ellison.
WBD is anticipated to focus on four principal criticisms of Paramount’s offer, arguing that it falls short on value, financing terms, and overall structure when compared with Netflix’s mix of cash and stock.
Affinity Partners, the investment firm led by Jared Kushner, Donald Trump’s son-in-law, withdrew its support for Paramount’s bid on Tuesday.
Paramount has accused WBD’s board of not engaging adequately with its approach, prompting the hostile-takeover strategy, and asserts that Paramount’s proposal is not its “best and final” offer.
Paramount argues that Netflix’s bid could attract greater regulatory scrutiny due to the potential concentration of influence if HBO Max is acquired, especially in the North American market, though Netflix contends that including other major platforms like YouTube would lessen this concern.
Netflix’s package includes a $5.8 billion termination fee, a sizable sum that signals confidence in obtaining regulatory approval.
Questions have also arisen about regulators’ potential pushback to the substantial funding Paramount has secured from sovereign wealth funds in Qatar, Saudi Arabia, and the United Arab Emirates.
SEC filings show these funds would contribute about $24 billion, nearly 60% of Paramount’s $40.7 billion equity financing, which dwarfs the Ellison contribution.
U.S. regulatory rules from the Federal Communications Commission restrict foreign ownership of broadcasters and certain telecom licenses (such as CBS and CNN) to 20%. Paramount argues these constraints do not apply to its deal because the sovereign wealth funds will waive governance rights, including board representation.
Neither Warner Bros Discovery nor Paramount provided comments.
