Warner Bros Rejects Paramount's $108.4 Billion Takeover Bid Over Financing Concerns

Warner Bros Discovery's board has turned down Paramount Skydance's $108.4 billion hostile takeover bid, citing inadequate financial assurances. Instead, Warner Bros continues talks with Netflix, whose offer includes a sturdy debt commitment. Paramount's financing claims remain under scrutiny as shareholders await further developments.

In a significant development, Warner Bros Discovery's board has rejected Paramount Skydance's massive $108.4 billion hostile takeover offer, questioning its financial solidity. The board, in a letter to shareholders disclosed via a regulatory filing, accused Paramount of misleading assurances regarding its $30-per-share cash proposal being backed by the Ellison family. This revelation marks yet another hurdle in the aggressive acquisition attempts by Paramount.

Evaluating the proposals, Warner Bros found Paramount's offer lacking when compared to Netflix's substantially binding agreement of $27.75 per share. Netflix's offer demands no equity financing and is supported by robust debt commitments. The board argued that Paramount's bid posed significant financial risks and structural uncertainties, citing the inadequacy and opacity of the backing Ellison family trust.

The board is yet to schedule a shareholder vote, anticipated in spring or early summer, according to Chairman Samuel Di Piazza. While Netflix welcomed the board's reinforcement of its agreement, Paramount maintained its financing claim, backed by a consortium involving the Ellison family and major banks. Warner Bros remains dubious of Paramount's financial condition and creditworthiness, spotlighting potential debt hazards post-merger.

(With inputs from agencies.)