Warner Bros. Discovery turns down Paramount’s offer once more, describing it as a ‘leveraged acquisition’

Warner Bros. Discovery Rejects Paramount’s Latest Acquisition Bid

The competition to acquire Warner Bros. Discovery (WBD), home to blockbuster franchises such as “Harry Potter,” “Game of Thrones,” and DC Comics, continues to intensify.

On Wednesday, the WBD board unanimously dismissed Paramount Skydance’s updated $108.4 billion offer, describing it as a “leveraged buyout” that would burden the company with $87 billion in new debt.

In a communication to shareholders, WBD advised against accepting Paramount’s proposal, warning that the enormous debt required for the deal increased the likelihood of its collapse. Instead, the board recommended supporting its previously announced $82.7 billion agreement with Netflix for its film and television assets.

Paramount, which had been speculated as a potential buyer before the Netflix deal was revealed, made a direct appeal to WBD shareholders in early December with an all-cash offer of $30 per share after WBD’s board chose Netflix. However, WBD turned down the bid, calling it “illusory” and questioning Paramount’s ability to fund the acquisition, while reaffirming support for Netflix’s cash-and-stock proposal.

Paramount responded by securing a $40 billion guarantee from CEO David Ellison’s father, Oracle co-founder Larry Ellison, and pledged to raise an additional $54 billion in debt to finance the transaction.

Despite these assurances, WBD remained skeptical. In a statement, the company noted, “Paramount, with a market value of $14 billion, is attempting a takeover that would require $94.65 billion in combined debt and equity—almost seven times its market capitalization. This aggressive approach introduces far greater risk for WBD and its investors compared to the more traditional structure of the Netflix merger.”

WBD also questioned whether Paramount could operate effectively if the deal succeeded, arguing that taking on such a large debt load would further damage Paramount’s already poor credit rating.

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WBD further highlighted concerns about Paramount’s negative free cash flow, which could worsen with an acquisition. In contrast, the company pointed to Netflix’s strong financial position, noting its approximately $400 billion market capitalization, investment-grade balance sheet, A/A3 credit rating, and projected free cash flow exceeding $12 billion for 2026.

Netflix expressed support for WBD’s decision, stating that the merger would unite complementary strengths and a shared dedication to storytelling.