Warner Bros. Discovery’s board of directors announced Wednesday that it is recommending shareholders reject a hostile takeover bid by Paramount Skydance and its controlling shareholder, the Ellison family.
The company’s board of directors said in a statement that it determined that Paramount Skydance’s proposal was “not in the best interests of WBD and its shareholders.”
The board’s recommendation to shareholders effectively invalidates Paramount’s proposal. However, Paramount may come back with an even higher offer.
“This proposal once again fails to address the important concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of the previous six proposals,” Warner Bros. Discovery Chairman Samuel Di Piazza said in a statement.
The company announced it would stand by its originally announced deal to sell the studio, HBO, and HBO Max to Netflix. “The terms of the Netflix merger are excellent,” Warner Bros. Discovery said in a letter to shareholders.
Paramount has launched a hostile takeover of the entire Warner Bros. Discovery company worth more than $108 billion, days after the media giant announced plans to sell some of its prized assets to Netflix.
David Ellison’s Paramount had claimed it could get approval for the deal faster than any deal with Netflix.
Mr. Ellison, whose billionaire father Larry Ellison is chairman of tech giant Oracle, has vowed to help block Paramount’s takeover of Warners. Larry Ellison is also close to the Trump administration.
But in recent days, President Donald Trump has criticized both Paramount and its new owners, the Ellisons.
“To those who consider me close to the new owners of CBS, I want you to understand that 60 Minutes has treated me far worse than they have ever treated me since the so-called ‘takeover,'” Trump said on Tuesday.
“If they’re your friends, you don’t want to meet them as enemies!” Trump added about social truth.
Netflix said it welcomes Warner Bros. Paramount’s refusal.
“The Warner Bros. Discovery board emphasized the strength of the Netflix merger agreement and that our acquisition is in the best interest of our shareholders,” said Ted Sarandos, co-CEO of Netflix.
“This has been a competitive process to achieve the best outcome for consumers, creators, shareholders and the broader entertainment industry,” he continued.
“We feel these facts really support approval of the deal,” Netflix co-CEO Greg Peters said on CNBC.
He said Netflix has a competitive advantage because he believes “ultimately regulators will see this as a pro-consumer, pro-creator, pro-worker company.”
Paramount did not immediately respond to NBC News’ request for comment.
On Tuesday, Jared Kushner’s private equity firm withdrew from a group of funds that had said it would finance Paramount’s proposed takeover of Warner Bros. Discovery.
Warner Bros. Discovery said in a securities filing that there were also additional bidders. The bidder was not disclosed, but another company offered to buy the company’s cable network for $25 billion in cash and a 20% stake in Warner Bros. Discovery’s streaming and studio division, with Netflix ultimately agreeing to buy it outright.
