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Warner Bros. is asking shareholders to reject a takeover bid from Paramount Skydance, saying a competing bid from Netflix would be better for customers.
“We firmly believe that the combination of Netflix and Warner Bros. will offer consumers greater choice and value, enable the creative community to reach even more audiences through our co-distribution, and fuel our long-term growth,” Warner Bros. said Wednesday.
“We entered into this transaction because their extensive portfolio of iconic franchises, extensive library and powerful studio capabilities will complement, rather than duplicate, our existing business.”
Paramount made a hostile bid last week, asking shareholders to reject the Netflix deal that Warner Bros.' board of directors had approved.
Paramount is offering $30 per share for Warner versus $27.75 per share for Netflix.
Paramount's proposal is not off the table. While Wednesday's letter to shareholders means Paramount's offer is not an endorsement by the Warner Bros. board, shareholders could still decide to tender their shares in favor of Paramount's offer for the entire company, including cable stalwarts CNN and Discovery.
Unlike Paramount's offer, Netflix's proposal does not include the purchase of Warner Bros.' cable business. The Netflix acquisition, if approved by regulators and shareholders, will be completed only after Warner completes the previously announced split of its cable operations.
Takeover bids face regulatory scrutiny
Paramount said it made six different offers that Warner executives rejected before announcing the Netflix deal on Dec. 5. Only then did the company send its proposal directly to Warner shareholders.
“The Board reviewed Paramount Skydance's latest unsolicited tender proposal with the same care and discipline it has applied throughout this process, including review of several previous proposals,” Warner Bros. said in a statement.
“The board’s evaluation went through a thorough and consistent process and is based on its fiduciary responsibilities.”
In addition to shareholder approval, both takeover bids face significant regulatory scrutiny. Warner's change in ownership will fundamentally change the entertainment and media industries, impacting film production, consumer streaming platforms and, in Paramount's case, the news landscape.
Critics of the Netflix deal say combining the major streaming company with Warner's HBO Max will give it overwhelming dominance in the market, while Paramount+'s streaming service is much smaller.
“This is something we've heard about for a long time, including when we started the streaming business,” Warner Bros. said. in a securities filing Wednesday. “Our position then and now is the same – we see this as a victory for the entertainment industry, not the end of it.”
Paramount Skydance makes a hostile takeover bid for Warner Bros. Discovery for US$108 billion just days after Netflix announced a US$72 billion deal with the legacy studio. This move has implications even for US President Donald Trump.
The proposals from Netflix and Paramount have raised alarms about what they could mean for film and TV production. Although Netflix agreed to honor Paramount's contractual obligations for theatrical releases, critics pointed to its past business model and reliance on online releases. However, Paramount and Warner Bros. – two of the “big five” old studios remaining in Hollywood today.
Paramount's attempt to buy Warner's cable networks and news businesses would also bring CBS and CNN under one roof. In addition to further accelerating media consolidation, it could raise questions about changes in editorial control, as was seen at CBS News both in the lead-up to and after Skydance's $8 billion purchase of Paramount in the US, which the company completed in August.
US President Donald Trump has already spoken out about his future involvement in the deal, indicating that politics will play a role in regulatory approval.
Trump previously said the Netflix deal “could be a problem” due to potential over-control of the market. The Republican president also has a close relationship with billionaire Oracle founder Larry Ellison, who is the father of the Paramount CEO whose family trust also strongly supports the company's bid to buy Warner.
Affinity Partners, the investment firm run by Trump's son-in-law Jared Kushner, previously said it would also invest in the Paramount deal. But on Tuesday the firm announced it was withdrawing from the tender.
However, Trump also tends to make decisions based on intuition and his personal mood. He continued to publicly criticize Paramount for CBS' editorial decisions. 60 minutes.
“To those people who think I'm close to the new owners of CBS, please understand that 60 minutes Since the so-called takeover, I have been treated far worse than ever before,” Trump wrote Tuesday on his Truth Social platform. “If they are friends, I would not like to see my enemies!”
