Warner Bros. Discovery Inc. is preparing to turn down a renewed takeover proposal from Paramount Skydance Corp., even after the bidder revised key elements of its offer, according to people familiar with the matter.
The board has not yet reached a formal decision but is scheduled to convene next week, said the people, who requested anonymity because the discussions are private. Directors remain dissatisfied with the economics of the proposal, particularly because Paramount has not raised its headline price, which Warner Bros. previously concluded was less attractive than a competing transaction with Netflix Inc..
Paramount, which controls the Paramount film studio and the MTV cable network, has mounted a public effort to rally investors behind its pursuit of Warner Bros., the owner of HBO and CNN. The suitor disclosed a $30-per-share all-cash bid on Dec. 8, shortly after Warner Bros. agreed to sell its studio and streaming assets to Netflix. Since then, Paramount has revised its proposal twice, most recently adding a commitment from billionaire Larry Ellison to personally back more than $40 billion in equity financing and related obligations.
Ellison and his son, David Ellison, gained control of Paramount in August and have been seeking to bulk up the company through acquisitions. A deal for Warner Bros. would deliver one of Hollywood’s legacy studios and greater scale in streaming to a smaller rival.
Still, Warner Bros.’ directors remain unconvinced. They are waiting for Paramount to improve the financial terms and have flagged concerns that the structure of the offer could limit Warner Bros.’ flexibility in managing its debt without Ellison family approval. The board has also questioned whether Paramount would fully cover the termination fee owed to Netflix if the existing agreement were abandoned. Some shareholders, according to the people, believe a higher bid will be required to secure approval.
In regulatory filings, Warner Bros. has maintained that the Netflix transaction offers clearer advantages, citing the buyer’s balance sheet strength and lower execution risk. Netflix, whose market value exceeds $400 billion, has also said it does not anticipate the deep job cuts that Warner Bros. expects would follow a combination with Paramount.
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