Warner's board asks shareholders to reject Paramount's takeover bid

BarcelonaOn Wednesday, Warner Bros. Discovery's shareholders rejected Paramount's $108.4 billion hostile takeover bid, calling it an "illusory" offer. They also accused the studio giant of misleading shareholders about its financing. The board's rejection came just hours after Affinity Partners, the investment fund chaired by Donald Trump's son-in-law Jared Kushner, withdrew from Paramount's bid, which it was supposed to help finance. In early December, Netflix announced it had reached an agreement with Warner to incorporate two of the group's three pillars: the film studio division, which includes franchises such as Harry Potterand the HBO Max platform. The deal involved the purchase of shares worth €62 billion and was pending approval from competition regulators and the Department of Justice, which opens the door to political interference from Trump. Three days later, Paramount Skydance shook up the audiovisual market by submitting an offer superior to Netflix's.

In a letter to shareholders, the Warner Bros. board asserts that Paramount "has consistently misled them" by claiming that its $30 per share offer was fully guaranteed, or that it had the backing of the Ellison family, led by billionaire and Oracle co-founder Larry Ellison. The tycoon is also the father of David Ellison, the current chairman of Paramount. The board points out that Netflix's offer of $27.75 per share is more secure.

For its part, Paramount has accused Warner Bros. of hiding behind a "cloud of obfuscation" and maintains that its cash offer provides greater certainty against "market fluctuations" than Netflix's cash and stock offer, which has been reduced by a drop in its share price. "Our proposal clearly offers WBD shareholders superior value and certainty, a clear path to closing the transaction, and does not leave them with a heavily indebted, subscale linear business," said Paramount CEO David Ellison.

The final decision on the sale of Warner Bros. has not yet been made, as shareholders can still choose to sell their Paramount shares.