WBD board backs Netflix’s $72 billion bid over Paramount Skydance’s $108.4 billion offer

New Delhi: The board of Warner Bros Discovery (WBD) has urged shareholders to reject a higher takeover proposal from Ellison family-owned Paramount Skydance and instead support Netflix’s earlier $72 billion offer, citing concerns over deal certainty and financing.

As per the news reports, in a statement issued on Wednesday, December 17, the WBD board said it unanimously believes Netflix’s proposal delivers greater certainty and value, despite Paramount Skydance’s late hostile bid valued at $108.4 billion.

Paramount Skydance, controlled by the Ellison family, launched its offer after WBD had already agreed to Netflix’s proposal, seeking to outbid the streaming company and create a larger media group. The bidding process, which also attracted interest from Comcast, concluded with Netflix securing WBD’s television, film studio and streaming assets.

The board raised questions over Paramount Skydance’s funding structure and accused the bidder of misleading shareholders by claiming its offer was fully backed by the Ellison family.

According to the statement, Paramount Skydance’s proposal includes an equity commitment of $40.65 billion that is not guaranteed by the Ellison family. Instead, the funding would depend on what the board described as an “unknown and opaque revocable trust”.

The board added that even if the trust failed to meet its obligations, its liability would be limited to around 7% of the commitment, or approximately $2.8 billion on a $108.4 billion transaction, raising further concerns about the offer’s credibility.

By contrast, the board described Netflix’s bid as a “superior” proposal that offers “more certain value” to shareholders.

Under the terms of the Netflix agreement, WBD shareholders would receive $23.25 in cash, $4.50 in Netflix shares, and additional value through shares in Discovery Global following its planned separation from WBD.