Warner Bros rejects revised Paramount bid

Warner Bros Discovery’s board has unanimously turned down Paramount Skydance's latest attempt to acquire the studio, saying its revised $108.4 billion hostile bid amounted to a risky leveraged buyout that investors should reject, global news agencies have reported.

In a letter to shareholders on Wednesday, Warner Bros' board said Paramount's offer hinges on "an extraordinary amount of debt financing" that heightens the risk of closing. It reaffirmed its commitment to streaming giant Netflix's $82.7 billion deal for the film and television studio and other assets.

The Warner Bros board voted against the $30-per-share cash offer on Tuesday, telling shareholders that Paramount's financing plan would saddle the smaller Hollywood studio with $87 billion in debt once the acquisition closed, making it the largest leveraged buyout in history.

The revised Paramount offer "remains inadequate particularly given the insufficient value it would provide, the lack of certainty in PSKY’s ability to complete the offer, and the risks and costs borne by WBD shareholders should PSKY fail to complete the offer," the Warner Bros board wrote.

Their assessment comes even after Paramount, which has a market value of around $14 billion, proposed to use $40 billion in equity personally guaranteed by Oracle co-founder Larry Ellison - father of Paramount CEO David Ellison - and $54 billion in debt to finance the deal.

The decision keeps Warner Bros on track for its deal with Netflix, even after Paramount amended its bid on December 22 to address the earlier concerns about the lack of a personal guarantee from Larry Ellison.

Netflix co-CEOs Ted Sarandos and Greg Peters welcomed Warner Bros' decision on Wednesday, saying it recognizes the streaming giant's deal "as the superior proposal that will deliver the greatest value to its stockholders, as well as consumers, creators and the broader entertainment industry."