Warner Bros recommends investors reject Paramount's offer in favor of
Netflix's
[December 18, 2025] By
WYATTE GRANTHAM-PHILIPS
NEW YORK (AP) — Warner Bros. Discovery is recommending its shareholders
reject an unsolicited buyout offer from Paramount Skydance in favor of a
rival bid from Netflix it said will better serve their interests and the
entertainment company's audiences.
The Warner board said in a letter to shareholders on Wednesday that
Paramount’s “inferior” offer carried “significant risks and costs,” in
large part because it relies heavily on borrowed money – whereas the
Netflix offer is backed by a company worth more than $400 billion.
Warner, which owns the Warner Bros. Pictures movie studio and HBO,
agreed earlier this month to a cash-and-stock offer from Netflix valued
at $72 billion. As part of that deal, Warner would first spin off its
its cable TV assets, including CNN and Discovery. Days later, Paramount
made a hostile, all-cash offer for all of Warner's properties valued at
$77.9 billion.
With the fate of marquee movie-making and streaming services on the
line, a Warner deal with either company would face intense scrutiny from
U.S. regulators.
Paramount has argued that its offer — coming from a smaller company —
would face an easier road with regulators. Warner's board disputed that
claim in its letter to shareholders, who ultimately have the power to
decide which offer to accept.
Netflix offered Warner shareholders $23.25 in cash, plus $4.50 in
Netflix shares, for each share of Warner. Paramount is offering $30 in
cash for each share of Warner.
Warner's stock price fell more than 2% Wednesday to $28.21 per share.
Shares of Paramount fell 5.4%, while those of Netflix rose 0.2%.
An acquisition by Netflix would be completed only after Warner finalizes
its previously announced separation of its cable operations.
Paramount urged Warner shareholders on Wednesday to tell the company
they prefer Paramount's “superior offer.”
“We will continue to move forward to deliver this transaction, which is
in the best interest of (Warner) shareholders, consumers, and the
creative industries,” Paramount CEO and Chairman David Ellison said.
Paramount has claimed it made six different bids that Warner leadership
rejected before announcing its deal with Netflix on Dec. 5.
Critics of Netflix’s deal say that combining the massive streaming
company with Warner’s HBO Max would give it overwhelming market
dominance, whereas the Paramount+ streaming service is far smaller.
“This is something that we’ve heard for a long time — including when we
started the streaming business,” Netflix co-CEOs Greg Peters and Ted
Sarandos said in a filing through Warner Bros. “Our stance then and now
is the same — we see this as a win for the entertainment industry, not
the end of it.”
Warner shareholders have until Jan. 8 to vote on Paramount’s offer.
[to top of second column] |
The Netflix logo is shown in this photo from the company's website
on Feb. 2, 2023, in New York. (AP Photo/Richard Drew, File)
 Bids from both Netflix and Paramount
have raised alarm for what they could mean for film and TV
production. While Netflix has agreed to uphold Warner's contractual
obligations for releasing films in theaters, critics fear the
streaming giant will ultimately favor online releases. Paramount and
Warner Bros. are two of the biggest studios left in Hollywood.
A combination of Paramount and Warner would bring
CBS and CNN under the same roof. That could raise questions about
news media consolidation and shifts in editorial control — as seen
at CBS News leading up to and following Skydance’s $8 billion
purchase of Paramount, which it completed in August.
President Donald Trump has been vocal about his plans to play a role
in regulatory approval.
Trump has said Netflix’s deal “could be a problem” because of the
potential for an outsized control of the market. The Republican
president has a close relationship with Oracle’s billionaire founder
Larry Ellison — the father of Paramount’s CEO.
Affinity Partners, an investment firm run by Trump’s son-in-law
Jared Kushner, previously said it would invest in the Paramount
deal. But on Tuesday, the firm announced it would be dropping out.
The sovereign wealth funds of Saudi Arabia, Abu Dhabi and Qatar are
backing Paramount’s bid, a detail some analysts say should be
drawing more scrutiny.
“The same U.S. officials and regulators who’ve sounded alarms about
China’s influence on TikTok should be crying foul here,” said Mike
Proulx, vice president and research director at Forrester, a market
research company. “The stakes on (Warner's) fate are higher and
wider-reaching than a single short-form video app.”
Warner’s board cited concern about the involvement of foreign
investors in its letter to shareholders.
It also was critical of Paramount's decision to use an Ellison
family trust to backstop the offer for Warner, which it said is not
the same thing as a “full and unconditional financing commitment.”
The family trust lost billions in value this month after shares of
Oracle tumbled on concerns it was spending too much on artificial
intelligence.
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AP Business Writer Matt Ott contributed to this story from
Washington.
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