Warner Bros. board again rejects Paramount deal due to debt risks

The board of directors of Warner Bros Discovery (WBD) has rejected Paramount Skydance's renewed attempt to acquire the studio, stating that Paramount's revised hostile bid of $108.4 billion represents a "risky deal [for WBD] with a high debt burden" that shareholders should reject.

Paramount's offer, according to representatives of the company's board of directors, is not in the best interests of Warner Bros. and its shareholders. Warner Bros. has again recommended that shareholders support the deal with Netflix.

In a letter to shareholders, Warner Bros.' board of directors noted that Paramount's proposal relies on "an extremely large amount of debt financing." The board estimated that the deal's financing plan would leave the studio with $87 billion in debt after closing. This would make the deal the largest leveraged buyout in the industry's history, according to the board's letter. Warner Bros. noted that Paramount's offer remains "insufficient," pointing to its low value to shareholders, the lack of confidence in the company's ability to complete the deal, and the significant risks and costs to Warner Bros. investors if it falls through.

The Warner Bros. board of directors also confirmed its commitment to the $82.7 billion deal with Netflix to acquire the company's film and television studio, as well as other assets.

Warner Bros shares fell 0.5% in premarket trading on January 7, while Paramount shares rose 1% and Netflix shares rose 0.5%.

In early December 2025, Paramount attempted to outbid Netflix's offer to acquire part of Warner Bros. for $27.75 per share in cash and securities. Paramount offered to buy Warner Bros. for $30 per share. The difference between Paramount's and Netflix's offers was that Netflix intended to buy only Warner's Hollywood studios and streaming business, while Paramount wanted the entire company.

In mid-December last year, Warner Bros' board of directors already urged shareholders to reject the offer to acquire Paramount Studios. Warner Bros noted at the time that Paramount's bid carried "numerous and significant risks."

This article was AI-translated and verified by a human editor