Warner Bros. Discovery’s board unanimously urged shareholders to reject a tender offer from Paramount Skydance, calling it inadequate and risky while throwing full support behind its proposed merger with Netflix.
In a statement released on Wednesday, the board said the Paramount Skydance bid fails to meet the bar of a “superior proposal” under WBD’s merger agreement and can be “terminated or amended” at any time, creating what it called untenable downside for investors.
“Following a careful evaluation of Paramount’s recently launched tender offer, the Board concluded that the offer’s value is inadequate, with significant risks and costs imposed on our shareholders,” board chair Samuel A. Di Piazza Jr. said.
The board also said the Ellison family has not provided an “equity backstop” — a firm guarantee that it would make up for any potential collapse in financing — for the bid and argued there is no material difference in regulatory risk between the Paramount offer and the Netflix deal.
WBD said details of its decision are laid out in a Schedule 14D-9 filing with the Securities and Exchange Commission, as the company presses shareholders to back the Netflix transaction as the “more certain value” path forward.
