Warner Bros. Discovery rejects Paramount’s bid again, calls it a ‘leveraged buyout’

Core Viewpoint - The bidding war for Warner Bros. Discovery (WBD) continues as the company rejects Paramount Skydance's $108.4 billion bid, citing concerns over excessive debt and recommending a deal with Netflix instead [1][2]. Group 1: Bidding Details - WBD's board unanimously rejected Paramount's revised bid, labeling it a "leveraged buyout" that would impose $87 billion in debt on the company [1]. - Paramount initially offered an all-cash, $30-per-share bid directly to WBD's shareholders after the Netflix deal was announced, which WBD deemed "illusory" [3]. - Following the rejection, Paramount secured a $40 billion guarantee from Larry Ellison and proposed raising $54 billion in debt to finance the acquisition [4]. Group 2: Financial Concerns - WBD expressed skepticism about Paramount's ability to manage the proposed acquisition, highlighting that the deal would require nearly seven times Paramount's market capitalization of $14 billion [5]. - The company raised concerns about Paramount's negative free cash flow, which would worsen with the acquisition, contrasting it with Netflix's strong financial position, including a market capitalization of approximately $400 billion and estimated free cash flow of over $12 billion for 2026 [6][7]. Group 3: Stakeholder Reactions - WBD urged its shareholders to reject Paramount's offer, emphasizing the risks associated with the high debt required for the deal and recommending support for the earlier $82.7 billion deal with Netflix [2]. - Netflix welcomed WBD's decision, indicating that the merger would combine complementary strengths and a shared passion for storytelling [8].