Warner Bros. rejects Paramount's hostile bid, accuses Ellison family of failing to put money into the deal

Core Viewpoint - Warner Bros. Discovery's board has unanimously rejected Paramount's $108 billion hostile bid, citing concerns over the financial backing from the Ellison family and the overall risks associated with the deal [5][7][8]. Group 1: Warner Bros. Discovery's Position - Warner's board reaffirmed support for Netflix's $27.75 per share proposal, stating it is the best deal for shareholders and urged investors not to tender shares to Paramount [2]. - The board expressed that Paramount's proposal contained "gaps, loopholes and limitations," including the ability for Paramount to amend the offer [1]. - Warner's board criticized Paramount for failing to provide a solid financial commitment from the Ellison family, which they deemed necessary for the deal [6][17]. Group 2: Paramount's Offer and Strategy - Paramount's proposal includes a cash offer of $30 per share, valuing the entire company at $78 billion, and it plans to absorb Warner's debt, bringing the total deal value to $108 billion [4][10]. - David Ellison, Paramount's CEO, has argued that their offer provides superior value and certainty compared to Netflix's bid, emphasizing the backing from the Ellison family [11][19]. - Paramount disclosed plans to rely on $24 billion from sovereign wealth funds and $11.8 billion from the Ellison family for the equity portion of the deal, alongside needing over $60 billion in debt financing [13][14]. Group 3: Market Reactions and Implications - Netflix shares rose by approximately 0.25% to $94.79, while Warner Bros. Discovery closed at $28.21 and Paramount at $13.10 [1]. - The Warner board noted that the ultimate decision regarding the bids rests with its shareholders, indicating that the situation remains fluid [20]. - Paramount has made six offers for Warner Bros., with the most recent proposal lacking a clear commitment from the Ellison family [15].