The board of Warner Bros. Discovery (WBD) has rejected Paramount’s revised takeover bid for a second time, doubling down on its support for an agreed merger with Netflix and warning shareholders that Paramount’s proposal carries significant financial and execution risks.
In a letter to shareholders dated January 7, 2026, the WBD board said Paramount’s latest offer remains inadequate and uncertain, despite claims that key concerns raised earlier had been addressed. The board described the bid as effectively a leveraged buyout that would saddle the combined company with excessive debt.
According to WBD, Paramount, which is considerably smaller, would need to take on more than US$50 billion in additional debt through complex financing structures to complete the acquisition. The board said this exposes shareholders to far greater risk compared with the Netflix transaction, which it described as offering clarity, stability, and execution certainty.
Under the agreed deal, Netflix is acquiring Warner Bros. Discovery at a value of US$27.75 per share, comprising US$23.25 in cash and the remainder in Netflix stock. The board said the structure provides immediate value while aligning shareholders with a financially stronger streaming-focused company.
Paramount has sought to ease investor concerns by pointing to financial backing from Oracle billionaire Larry Ellison, who is helping finance the bid. His son, Paramount CEO David Ellison, initiated the takeover battle last year with an unsolicited approach targeting WBD’s media assets, including CNN.
Following that initial bid, WBD launched a formal auction process that culminated in the acceptance of Netflix’s offer. Paramount later went public with a higher proposal of US$30 per share, but the board said the increase did not sufficiently compensate for the heightened financial risk.
A key sticking point remains the valuation of WBD’s cable television assets, which are excluded from the Netflix transaction. These assets, including CNN, are expected to be spun off into a separate publicly traded entity known as Discovery Global later this year. While WBD believes the spinoff could unlock meaningful standalone value, Paramount reportedly values the unit at just US$1 per share.
The board also reiterated earlier concerns about the conditional nature of Paramount’s offer and the sources of its financing. Although Paramount announced in December 2025 that Larry Ellison would personally guarantee US$40.4 billion of the proposed US$78 billion transaction, WBD said this did not materially change the overall risk profile.
Paramount has now matched Netflix’s $5.8 billion breakup fee but has not raised its offer beyond US$30 per share. With the latest rejection, Paramount faces limited options: abandon the bid, increase its offer, or attempt to appeal directly to shareholders in a hostile vote.
The standoff represents one of the most significant merger battles in the global media industry, with implications for the future of streaming, legacy television, and media consolidation. For now, the WBD board has made its position clear, it sees Netflix as the safer and more strategically aligned partner in an industry undergoing rapid transformation.
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