Warner Bros rejects Paramount bid despite Larry Ellison’s $40bn pledge

Core Viewpoint - Warner Bros has rejected Paramount's $108 billion hostile takeover bid for the second time, citing that it is not in the best interests of the company or its shareholders, while continuing to support an $83 billion deal with Netflix [1][6]. Group 1: Takeover Bid Details - Paramount's revised bid includes a $30-per-share offer, which Warner Bros describes as the largest leveraged buyout in history [3]. - The bid is backed by three Gulf states and Larry Ellison, who has pledged a $40 billion personal guarantee for the equity of the offer [2][4]. - Warner Bros has publicly and privately rebuffed the bid multiple times, emphasizing concerns over the debt financing involved [3][4]. Group 2: Financial Implications - Warner Bros warned that accepting Paramount's bid would incur $4.7 billion in costs, including a $2.8 billion termination fee to Netflix [6]. - The company believes that Paramount's offer lacks sufficient value and poses significant risks to shareholders, particularly due to the extraordinary amount of debt financing [7]. Group 3: Strategic Positioning - Warner Bros is engaged in a significant takeover battle, which is part of a broader shake-up in Hollywood amid the streaming age [7]. - The Netflix deal involves spinning off Warner Bros' traditional networks division, contrasting with Paramount's bid for the entire company [8].