Warner Bros. Discovery has officially rejected Paramount’s unsolicited takeover attempt, urging shareholders to reject the rival offer and standing firmly behind its existing agreement with Netflix.
In a letter released on Wednesday, December 17 and obtained by The Wall Street Journal, Warner said Paramount’s proposal introduces unnecessary risk and falls short of the certainty provided by the existing Netflix deal.
The company didn’t mince words in its assessment, calling Paramount’s offer “illusory” and warning investors that the financing behind it raises serious concerns.
Warner told shareholders that the Netflix transaction is backed by a public company with significant scale and financial stability, adding that “the terms of the Netflix merger are superior.”
At the center of the dispute is the nature of Paramount’s move itself. A hostile bid occurs when a buyer makes an offer directly to shareholders without the target company’s board support.
Paramount made that move after Warner had already agreed to a Netflix deal for its studio and HBO Max streaming business following a planned corporate split, escalating the process into a public standoff.
Paramount has maintained that its all-cash bid provides greater immediate value and lower closing risks. CEO David Ellison has argued the company was responding to Warner’s stated preferences, saying, “We were told repeatedly that they wanted all cash. We delivered all cash.”
Warner, however, strongly disagreed with Paramount's characterization of the process. The company said its board engaged extensively with all bidders and raised concerns about Paramount’s funding structure multiple times.
In its letter, Warner noted that the Ellison family’s commitment relies on a revocable trust and said documents supporting the bid “contain gaps, loopholes, and limitations that put you, our shareholders, and our company at risk.”
Paramount pushed back on that assessment, accusing Warner of overcomplicating the issue. “In reality, it is all quite simple,” the company said in a statement. “$30 in cash fully backstopped by a well-capitalized trust … of one of the most well-known founders and entrepreneurs in the world, Larry Ellison.”
Paramount also emphasized that its offer is not final, signaling it could return with a higher bid.
Warner highlighted Netflix’s investment-grade balance sheet and market value of more than $400 billion as key advantages.
Netflix co-CEO Ted Sarandos welcomed Warner’s stance, saying the companies “complement each other,” and added that Netflix is excited to combine its platform with Warner’s theatrical film division, television studio, and “the iconic HBO brand.”