Hollywood Showdown: Warner Bros Rejects Paramount's Mega Bid in Favor of Netflix

Warner Bros Discovery's board has rejected a $108.4 billion hostile takeover bid from Paramount Skydance due to significant debt concerns and potential risks. Instead, Warner Bros is moving forward with a deal from Netflix. The conflict underscores a significant power struggle in Hollywood's rapidly evolving entertainment landscape.

In a decisive move, Warner Bros Discovery has turned down Paramount Skydance's $108.4 billion acquisition proposal, citing excessive debt and leveraged buyout risks. The board remains committed to an $82.7 billion agreement with streaming giant Netflix, perceived to offer greater certainty and value to shareholders.

Paramount, employing a blend of $40 billion in equity backed by Larry Ellison and $54 billion in debt, had made an attempt to trump Netflix's offer. However, Warner Bros' leadership highlighted concerns over potential financial instability and execution risks associated with Paramount's financing plan.

The decision sets the stage for a high-stakes power struggle in Hollywood, where streaming services increasingly dominate. Analysts note the implications for the industry's landscape, as Warner Bros aims for stability and strategic partnerships with Netflix rather than risky financial entanglements with Paramount.

(With inputs from agencies.)