Reviewed by Gotrade Internal Analyst
Jakarta, Gotrade News - Warner Bros Discovery looks set to turn down Paramount Skydance’s $108.4 billion hostile bid.
This move boosts the odds of a merger with Netflix, Inc., which is seen as a safer bet for shareholders regarding execution risks.
Key Takeaways
- Warner Bros board is expected to reject Paramount’s offer, even with Larry Ellison’s personal guarantee.
- The Netflix merger is preferred because the funding structure makes more sense.
- The $2.8 billion breakup fee remains a major deal-breaker in Paramount’s proposal.
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Reports from Reuters suggest this rejection is happening despite billionaire Larry Ellison throwing in a personal guarantee.
Warner Bros' board hasn't made the final call yet, but they’re scheduled to meet next week to hash it out.
According to sources in the know, both Warner Bros and Paramount have refused to comment officially.
Execution Risks are the Deal-Breaker
The main focus for Warner Bros' management right now is comparing the certainty of the deals between Paramount and Netflix.
Even though Paramount’s cash offer is higher on paper, Netflix’s $82.7 billion proposal is considered to have a much cleaner funding structure.
Analysts see the Netflix deal as having far fewer risks of falling apart.
On top of that, Warner Bros would be on the hook for a $2.8 billion "breakup fee" if they walk away from the initial Netflix agreement.
Harris Oakmark, Warner Bros' fifth-largest investor, stated that Paramount’s revised offer just isn’t enough to cover that fee.
Investors and Regulators Weigh In
Paramount argues that their combined entity would create a studio even bigger than The Walt Disney Company.
They also claim their cash offer is more solid compared to Netflix stock, which can be volatile.
However, concerns about media consolidation have got US regulators and politicians paying close attention.
US President Donald Trump has even stated he plans to weigh in on the potential impact of this massive acquisition.
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Reference:
- Reuters, Warner Bros likely to reject Paramount's latest hostile bid, source says. Accessed on December 31, 2025
- The Japan Times, Warner Bros. plans to reject Paramount offer next week. Accessed on December 31, 2025
- Featured Image: Shutterstock
Disclaimer
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