Warner Bros. plans to reject Paramount bid on funding, terms

Core Viewpoint - Warner Bros. Discovery Inc. plans to reject Paramount Skydance Corp.'s hostile takeover bid due to concerns over financing and other terms [1][2]. Group 1: Warner Bros. Response - Warner Bros.' board will urge shareholders to reject Paramount's tender offer, believing that their existing agreement with Netflix offers greater value and certainty [2]. - The response to Paramount's offer could be filed as early as Wednesday, but no final decision has been made yet [3]. - Concerns about the financing proposed by Paramount, particularly the revocable trust backing it, are significant for Warner Bros. [4]. Group 2: Paramount's Bid and Adjustments - Paramount's offer is $30 per share, valuing Warner Bros. at over $108 billion, including debt [9]. - Paramount has indicated that its $30-a-share offer is not its "best and final," suggesting potential for a higher bid [10]. - Adjustments to the bid have been made in response to Warner Bros.' concerns, including the withdrawal of $1 billion in financing from Tencent due to national security concerns [7]. Group 3: Regulatory and Business Concerns - Warner Bros. is worried about the ability to conduct business during the lengthy regulatory approval process for a sale [6]. - Paramount's offer does not provide enough flexibility for Warner Bros. to manage its business or balance sheet effectively [6]. - Warner Bros. has an agreement with Netflix that restricts soliciting other proposals but allows for consideration of incoming offers [11].