Warner advises shareholders not to accept Paramount's offer
Warner Bros. Discovery has advised its shareholders against accepting Paramount's takeover bid. In a letter to shareholders, Warner management described Paramount's offer as “illusory” and reiterated concerns about the financing of the bid.
Paramount vs. Netflix
Earlier this month, Netflix agreed to pay $72 billion, or $27.75 per share in cash and stock, for Warner's studio and HBO Max streaming business after the entertainment company split into two parts. Paramount responded to the deal with a hostile takeover bid of $77.9 billion for Warner in total.
Letter from Warner
The Wall Street Journal reported on Tuesday that Warner's rejection was imminent.
The merger with Netflix, on the other hand, is fully backed by a publicly traded company with a market capitalization of more than $400 billion and an investment-grade balance sheet, Warner said. “The terms of the merger with Netflix are better,” Warner explained in his letter. “The offer from [Paramount] provides insufficient value and entails numerous significant risks and costs for [Warner].”