Warner Bros. Discovery Board Urges Shareholders to Reject Paramount's Tender Offer for Better Value

Warner Bros. Discovery Board Recommends Shareholders Reject Paramount Tender Offer

On December 17, 2025, Warner Bros. Discovery, Inc. (WBD) firmly advised its shareholders to decline the unsolicited tender offer put forth by Paramount Skydance, also known as PSKY. The Board of Directors has evaluated this offer and concluded it does not align with the best interests of WBD stakeholders. Instead, they emphasize their support for the ongoing merger agreement with Netflix, asserting it provides superior value and certainty.

Chairman Samuel A. Di Piazza, Jr. expressed the Board's belief that the Paramount offer lacks the necessary value and imposes considerable risks on shareholders. Given this unanimous determination, the Board reaffirms its commitment to the Netflix deal, which was established on December 4, following a thorough review process. According to Di Piazza, the Netflix merger positions WBD shareholders to receive $23.25 in cash, along with $4.50 in shares of Netflix common stock, thus ensuring a more secure and advantageous arrangement.

The Board highlighted that Paramount's tender offer mirrors a proposal previously rejected by shareholders, failing to address critical concerns raised during ongoing discussions about its previous six offers. In light of the Board's deliberations, they provided a detailed letter to shareholders explaining the rationale behind their decision, reiterating the significant risks tied to the PSKY proposal.

Key Concerns About the Paramount Offer

1. Inadequate Value: The Board underscored its belief that the value delivered through the Netflix merger far surpasses that of the PSKY proposal. They indicated that accepting the latter could incur hidden expenses and potential liabilities for WBD shareholders.

2. Structural Risks: Paramount's offer relies on funding from an opaque, conditional trust with no equity backstop from the Ellison family. This lack of certainty raises red flags about the credibility of the equity supporting PSKY’s proposal.

3. Regulatory Risks: The Board believes there is no significant difference in regulatory challenges between the PSKY bid and the Netflix merger, despite PSKY’s claims to the contrary. Both transactions are seen as manageable in obtaining necessary approvals on both domestic and international fronts.

4. Potential Costs: Accepting the PSKY offer could lead to substantial additional costs, including a $2.8 billion termination fee owed to Netflix if the deal falls through. The Board estimates that these costs could amount to approximately $1.66 per share, ultimately impacting shareholder value.

5. Lack of Deal Certainty: The illusory nature of PSKY’s tender offer, which can be canceled or altered at any time, contributes to an unacceptable level of uncertainty for shareholders.

Moving Forward with Netflix

The Board remains confident that the merger with Netflix is the best path forward for maximizing shareholder value. They look forward to specific benefits this deal will create, urging shareholders to read the detailed 14D-9 filing available on WBD's website for further insights into their rigorous evaluation process and the strategic advantages identified in aligning with Netflix.

In conclusion, the Board of Warner Bros. Discovery strongly recommends that WBD shareholders reject the PSKY tender offer in favor of pursuing the merger with Netflix, recognizing it as a financially prudent decision that prioritizes long-term value and security.