Warner Bros. Discovery, Inc. announced today that its Board of Directors unanimously concluded that Paramount Skydance’s tender offer, revised on December 22, 2025, is not in the best interest of WBD and its shareholders.
The Board unanimously reiterates its recommendation in support of the Netflix combination and recommends that WBD shareholders reject PSKY’s offer.
In a statement, Samuel A. Di Piazza, Jr., Chair of the Warner Bros. Discovery Board of Directors told shareholders, “The Board unanimously determined that the Paramount’s latest offer remains inferior to our merger agreement with Netflix across multiple key areas. Paramount’s offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed. Our binding agreement with Netflix will offer superior value at greater levels of certainty, without the significant risks and costs Paramount’s offer would impose on our shareholders.”
In a letter to shareholders Warner Bros stated, “Under the Netflix merger agreement, WBD shareholders will receive significant value with $23.25 in cash and shares of Netflix common stock representing a target value of $4.50 based on a collar range in the Netflix stock price at the time of closing, which has future value creation potential.”
“The Board also considered the costs and loss of value for WBD shareholders associated with accepting the PSKY offer. WBD would be obligated to pay Netflix a $2.8 billion termination fee for abandoning our existing merger agreement; incur a $1.5 billion fee for failing to complete our debt exchange, which we could not execute under the PSKY offer without PSKY’s consent; and incur incremental interest expense of approximately $350 million. The total cost to WBD would be approximately $4.7 billion, or $1.79 per share. These costs would, in effect, lower the net amount of the regulatory termination fee that PSKY would pay to WBD from $5.8 billion to $1.1 billion in the event of a failed transaction with PSKY. In comparison, the Netflix transaction imposes none of these costs on WBD.”
Netflix co-CEOs Ted Sarandos and Greg Peters said in the statement, “The WBD Board remains fully supportive of and continues to recommend Netflix’s merger agreement, recognizing it as the superior proposal that will deliver the greatest value to its stockholders, as well as consumers, creators and the broader entertainment industry.”
Following today’s announcement, Paramount can raise its bid or demand a vote from WBD’s shareholders. Because Paramount’s offer is hostile, WBD stock owners might reject the board’s recommendation if the company chooses to involve shareholders directly.
WBD shares fell slightly after the letter’s release.
By CEO NA Editorial Staff
