Warner Bros. Discovery Rejects Paramount's $108.4 Billion Hostile Bid for Netflix Deal
Warner Bros. Discovery has rejected Paramount's $108.4B hostile bid, preferring Netflix's $82.7B deal. WBD cited Paramount's high debt and junk credit rating as key risks.
$108 billion wasn't enough to seal the deal. The Warner Bros. Discovery (WBD) board has unanimously voted to rebuff Paramount's $108.4 billion hostile takeover bid, labeling it as risky and financially unsound.
Why Warner Bros. Discovery Rejected Paramount Bid in Favor of Netflix
According to reports from today's shareholder presentation, the board is instead throwing its full support behind Netflix's pending $82.7 billion purchase of its streaming and movie studio businesses. This strategic pivot also includes a separate spinoff of the Warner Bros. cable TV division, a move aimed at streamlining operations for the future of entertainment.
| Metric | Paramount Offer | Netflix Offer |
|---|---|---|
| Bid Value | $108.4 billion | $82.7 billion |
| Pro Forma Debt | $87 billion | Stable |
| Board Status | Rejected (Hostile) | Supported (Strategic) |
The Risk of an 'Illusory' Deal
Warner Bros. characterized the Paramount bid as "illusory," citing the "extraordinary amount of debt financing" required to complete the transaction. If executed, it would be the largest leveraged buyout in history, saddling the new entity with $87 billion in gross debt. WBD officials noted that Paramount—a company with a $14 billion market cap—currently holds a 'junk' credit rating and suffers from negative free cash flow.
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Warner Bros. Discovery rejects Paramount's $108.4B bid in favor of Netflix's $82.7B offer, citing massive debt risks and Netflix's superior financial health.
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Warner Bros. Discovery rejects Paramount's $108.4B bid in favor of Netflix's $82.7B offer, citing massive debt risks and Netflix's superior financial health.