In a dramatic turn of events that has the business world buzzing, Warner Bros. Discovery has once again snubbed Paramount’s aggressive takeover attempt, opting to stick with Netflix as its partner of choice. But here’s where it gets controversial: despite Paramount’s revised offer addressing many of Warner Bros.’ initial concerns, the WBD board still deems it ‘inadequate’ and too risky. Why? Let’s dive in.
On Wednesday, the WBD board issued a statement (https://ir.wbd.com/news-and-events/financial-news/financial-news-details/2026/WARNER-BROS--DISCOVERY-BOARD-OF-DIRECTORS-UNANIMOUSLY-RECOMMENDS-SHAREHOLDERS-REJECT-AMENDED-PARAMOUNT-TENDER-OFFER/default.aspx) urging shareholders to reject Paramount’s updated bid, arguing that it pales in comparison to the stability and certainty of their existing deal with Netflix (https://www.cnn.com/2025/12/17/media/warner-bros-chose-netflix-over-paramount-again-now-what). The board’s letter highlights a critical issue: Paramount’s plan relies heavily on a leveraged buyout, a financial strategy that involves borrowing massive amounts of money to fund the acquisition. And this is the part most people miss—Paramount, being significantly smaller than WBD, would need to take on over $50 billion in debt to pull this off, a move the WBD board calls ‘materially more risky.’
Paramount has tried to ease these fears by bringing in Oracle billionaire Larry Ellison as a financial backer, with his son David Ellison, Paramount’s CEO, leading the charge. But WBD isn’t convinced. They argue that the risks of Paramount’s debt-laden plan far outweigh the benefits, especially when compared to the ‘certainty of the Netflix merger.’ Here’s the kicker: Paramount’s revised offer still doesn’t raise the bid above $30 per share, while Netflix’s offer stands at $27.75 per share, with a mix of cash and stock.
But is WBD playing it too safe? Some might argue that Paramount’s higher cash offer could be more attractive to shareholders, especially if they’re willing to take on the risk. And let’s not forget WBD’s cable assets, including CNN, which are being spun off into a new company called Discovery Global. WBD believes this spinoff will hold significant value, but Paramount has undervalued it at just $1 per share. Is Paramount underestimating the potential of these assets, or is WBD overestimating their worth?
When Paramount first went public with its hostile bid, WBD called it ‘illusory,’ questioning the financing sources, which include royal families from Saudi Arabia, Qatar, and Abu Dhabi. Paramount responded by having Larry Ellison personally guarantee $40.4 billion of the $78 billion deal and even offered WBD shareholders a peek into the Ellison family trust’s finances. They also upped the breakup fee to $5.8 billion, matching Netflix’s offer. Yet, WBD remains unmoved.
Now, Paramount faces a critical decision: walk away, sweeten the deal, or go directly to WBD’s shareholders for a vote. The ball is in their court, but the question remains—is Paramount’s bold move a risky gamble or a golden opportunity? What do you think? Is WBD right to play it safe with Netflix, or should they take a chance on Paramount’s higher bid? Let us know in the comments!
