WASHINGTON, Jan 7 — Warner Bros Discovery's (WBD) board of directors has unanimously rejected Paramount Skydance's takeover offer, saying "it is not in the best interests of WBD and its shareholders" and is not a "superior proposal" over Netflix's bid.
The German Press Agency (dpa) reported WBD as recommending that shareholders approve Netflix's bid.
"The Board unanimously determined that the Paramount's latest offer remains inferior to our merger agreement with Netflix across multiple key areas. Paramount's offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing
"Our binding agreement with Netflix will offer superior value at greater levels of certainty," said Warner Bros Discovery board chair Samuel A Di Piazza Jr in a statement on Wednesday.
Netflix's offer, made on December 5 last year, is to acquire Warner Bros, including its film and television studios, HBO Max, and HBO, in a cash-and-stock transaction valued at US$27.75 per WBD share, with a total enterprise value of approximately US$82.7 billion (RM335.6 billion).
Under the Netflix bid, the planned separation of WBD's Global Linear Networks business, Discovery Global, would continue. That is expected to be completed in the third quarter of this year.
On December 8, the United States (US) media conglomerate Paramount Skydance said it was countering Netflix’s US$82.7 billion offer with a bid valued at US$108.4 billion (RM439.8 billion), in what is being seen as a hostile takeover attempt.
Paramount's proposed transaction is for the entirety of WBD, including the Global Networks segment. The bid is primarily backed by the Ellison family and RedBird Capital, in addition to debt fully committed by Bank of America, Citi, and Apollo Global Management.
David Ellison, the son of Oracle co-founder and Donald Trump supporter Larry Ellison, is the chairman and chief executive officer of Paramount. Whoever buys WBD would be subject to federal approval.
