Warner Bros likely to reject Paramount’s revised hostile bid, CNBC reports
GeokHub
Contributing Writer
NEW YORK, Dec 30 (GeokHub) — Warner Bros Discovery is expected to reject Paramount Skydance’s amended $108.4 billion hostile takeover bid, despite a personal guarantee from billionaire Larry Ellison backing the offer, CNBC reported on Monday, citing a person familiar with the matter.
Warner Bros’ board has not made a final decision but is expected to meet next week, the source said, requesting anonymity to discuss internal deliberations.
Warner Bros and Paramount declined to comment.
A rejection would keep Warner Bros on track to pursue a rival cash-and-stock deal with Netflix, despite Paramount’s efforts to sweeten its proposal.
Paramount, controlled by Ellison’s son David, who serves as chairman and chief executive, added a personal equity guarantee from Larry Ellison in an effort to address concerns that had weighed on its earlier bid. However, the company did not raise its $30-per-share all-cash offer, instead increasing its regulatory reverse termination fee to match Netflix’s and extending the tender offer deadline.
Netflix’s $82.7 billion proposal, though lower in headline value, offers greater financing certainty and fewer execution risks, analysts have said.
Under the terms of the Netflix agreement, Warner Bros would be required to pay a $2.8 billion breakup fee if it abandons the deal.
Harris Oakmark, Warner Bros’ fifth-largest shareholder with a 96 million-share stake, said Paramount’s revised bid remained “insufficient,” noting it did not fully cover the potential breakup fee.
Paramount has argued that its offer would face fewer regulatory hurdles. A combined Paramount-Warner Bros entity would create a media group larger than industry leader Disney and merge two major television operators.
Warner Bros’ board previously urged shareholders to reject Paramount’s $108.4 billion proposal for the entire company, including its cable television assets, citing concerns over financing certainty and the lack of a comprehensive guarantee from the Ellison family.
Paramount has also said its offer is less exposed to market volatility than Netflix’s proposal, which is tied to fluctuations in Netflix’s share price.
U.S. lawmakers from both parties have raised concerns about further consolidation in the media industry, and President Donald Trump has said he plans to weigh in on the proposed transaction.
