Warner Bros rejects Paramount’s $108.4b bid, backs Netflix offer

Warner Bros Discovery’s board has rejected a US$108.4 billion takeover offer from Paramount, calling the bid risky and lacking in reliable financing.

Paramount and Netflix have both sought to acquire Warner Bros, which owns major film and TV studios as well as the HBO Max video-streaming service.

The board said Paramount’s US$30-per-share cash offer was not fully guaranteed by the Ellison family, despite claims, and raised concerns over Paramount’s financial stability and creditworthiness.

Instead, Warner Bros prefers a binding US$27.8 per share cash-and-stock deal from Netflix, which the board said does not require equity financing and has strong debt backing.

Paramount, led by CEO David Ellison, continues to argue its offer is superior and provides more certainty.

Shares of Warner Bros fell 1.2% after the news, while Netflix rose 2.5%, and Paramount dropped 4.8%.

Warner Bros has not yet set a date for a shareholder vote on the proposed Netflix merger.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

Netflix will push a market of total US TV viewing time, where it claims 8-9% share behind YouTube at 13% 1. The Department of Justice (DOJ) usually treats paid streaming as separate from linear TV, social video, or theatrical distribution (movie theater releases) 1.
In paid subscription streaming, a combined Netflix-HBO Max would hold 39% of US revenue 1, with 43% of global subscription video on demand (SVOD) subscribers per Paramount 2. The DOJ has scrutinized similar levels 1 and often pushes divestitures over conduct promises, so Netflix may need asset sales to secure approval 3.
Standard & Poor’s pegs Netflix at 51% of European streaming revenue versus Disney at 10% 4. The European Commission, the EU antitrust authority, often favors divestitures over blocks and could require an HBO Max sale 4.

Private equity firms and strategic buyers should get ready for a possible HBO Max sale, because the European Commission often requires asset divestments instead of blocks 4.
Theater chains and cinema groups may find allies in Europe, given worries about Netflix’s limited theatrical release plan 4. Backers of traditional release windows can pitch themselves as options that preserve cinema-first models regulators want.
Technology vendors for media companies can expect mergers and acquisitions (M&A) because Warner Bros.’ board urged shareholders to reject Paramount’s tender offer (a public bid to buy shares directly from shareholders) 5 and can pitch content management, distribution infrastructure, or AI personalization to bidders and divestiture buyers during the 12-18 month review 6.