When Paramount Skydance turned hostile and offered a counter deal of $108.4 billion to Warner Bros Discovery, speculations rose that the studio might take Paramount’s deal as it offered more money and because Skydance had a better relationship with President Donald Trump, who might influence the deal.
However, in a change of events, Warner Bros has rejected Paramount’s offer, calling it “illusory” as it accused the studio giant of misleading shareholders about its financing.
Paramount has been in a race with Netflix to win control over Warner Bros Discovery, along with prized film and television studios, HBO Max streaming service and franchises like Harry Potter.
Uncertainty and Risks
In a shareholder letter, WBD’s board said Paramount repeatedly suggested its $30-per-share cash bid was fully guaranteed or backstopped. However, WBD argues the proposal relies on structures and commitments that do not provide the binding certainty shareholders would expect in a transaction of this size, and that the bid carries meaningful execution and funding risk.
WBD also pointed to the real costs of walking away from Netflix: the company warned shareholders that switching deals could trigger billions in penalties and related expenses, including a sizable breakup fee.
Netflix Tries to Soothe Hollywood’s Theatrical Fears
A key concern about a Netflix-led acquisition is whether it would further shrink the traditional theatrical pipeline. Reporting indicates Netflix has told WBD it would continue releasing the studio’s films in cinemas.
Right now, if Paramount Skydance wants to stay in the race, it may need to strengthen the binding nature of its financing, sweeten economics (including fees), and convince shareholders it can close with less risk than WBD’s board asserts.
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