Warner Bros Rejects Paramount's Mega Bid Citing Financial Risks

Warner Bros Discovery's board rejected Paramount Skydance's $108.4 billion hostile bid, citing inadequate financial assurances. The board stated that Paramount's pledge was not fully backed by the Ellison family, suggesting structural risks in the proposed financing. Warner Bros favored Netflix's binding offer instead.

The board of Warner Bros Discovery turned down an audacious $108.4 billion hostile bid from Paramount Skydance on Wednesday, citing insufficient financial assurances. In a formal letter to shareholders, the board expressed displeasure with Paramount's claim that its cash offer was secured by the Ellison family's backing.

Warner Bros' board highlighted numerous risks in Paramount's offer, stating that it lacked comprehensive support and posed significant financial danger. They favored Netflix's more secure proposition over Paramount's, noting its absence of equity financing necessities and solid debt commitments.

Paramount, persistently pursuing a deal, presented an alternative financing structure backed by its Ellison Revocable Trust. However, Warner Bros remained unconvinced, pointing to the trust's opaque nature and asset withdrawal potential, returning to doubts regarding Paramount's financial stability and creditworthiness.

(With inputs from agencies.)