Paramount–Skydance backs Warner Bros. Discovery bid with ‘greater value’ promise

Showing no signs of backing down from its battle with Warner Bros Discovery, Paramount Skydance has reiterated that its $108.4 billion acquisition proposal delivers superior value compared with a rival offer from Netflix, according to global news agencies.

Paramount has argued that the cable business at the heart of Netflix’s proposal carries little to no standalone value. Warner Bros Discovery on Wednesday rejected Paramount’s revised hostile bid, which comprises $40 billion in equity—personally backed by Oracle founder Larry Ellison—and $54 billion in debt. Ellison is the father of David Ellison, Paramount’s chief executive.

In a statement issued on Thursday, Paramount said the equity portion tied to the proposed cable spinoff, referred to as Discovery Global, would likely be worth nothing if valued in line with Versant. The company added that there were strong reasons the spinoff could trade at an even steeper discount than Versant.

Paramount also warned that Netflix’s deal structure could materially reduce the cash ultimately received by Warner Bros Discovery shareholders. According to the company, the additional debt required to support the Netflix transaction could lower shareholder payouts to around $20 per share, compared with the $23.25 per share implied under Paramount’s current offer.

Following these developments, shares of Warner Bros Discovery and Netflix fell by less than 1 per cent each, while Paramount’s stock rose 0.6 per cent.

On Thursday, Warner Bros Discovery’s board unanimously rejected Paramount Skydance’s latest bid, stating that the revised $108.4 billion offer amounted to a highly risky leveraged buyout that shareholders should not support. In a letter to shareholders issued on Wednesday, the board said Paramount’s proposal depended on “an extraordinary amount of debt financing,” significantly increasing execution risk. It reaffirmed its backing for Netflix’s $82.7 billion deal covering the studio’s film and television assets.

The board had earlier voted against Paramount’s $30-per-share cash offer on Tuesday, warning that the financing structure would leave Warner Bros Discovery with $87 billion in debt post-acquisition—making it the largest leveraged buyout in history.