Warner Bros Discovery’s board has formally rejected Paramount Skydance’s $108.4 billion hostile takeover bid, citing concerns that Paramount misled shareholders about the financing of its offer. The rejection comes a day after Affinity Partners, a fund backed by Jared Kushner, Trump’s son-in-law, withdrew from supporting the deal.

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Paramount’s Bid Under Scrutiny

In a letter to shareholders on Wednesday, Warner Bros Discovery stated that Paramount had “consistently misled” investors about the $30-per-share cash offer, claiming it was fully guaranteed, or “backstopped,” by the Ellison family, led by Oracle co-founder Larry Ellison. Paramount had asserted that the equity and debt structure supporting its bid was secure, but Warner Bros Discovery described the claim as misleading.

“It does not, and never has,” the board wrote, referring to the supposed guarantee of Paramount’s offer, noting that it carried “numerous, significant risks.”

The Warner Bros board concluded that Paramount’s bid was inferior to Netflix’s binding $27.75-per-share offer, which requires no equity financing and is backed by strong debt commitments. Unlike Paramount’s offer, Netflix’s deal represents a binding merger agreement with fewer conditional risks.

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Paramount vs. Netflix: The Battle for Warner Bros

Paramount entered a high-stakes race with Netflix to acquire Warner Bros, including prized assets such as HBO Max, major film franchises like Harry Potter, and TV networks. After Warner Bros accepted Netflix’s offer, Paramount launched a hostile bid in an attempt to outmaneuver the streaming giant.

Paramount argued directly to shareholders that its financing was “air-tight,” with $41 billion in new equity assured by the Ellison family and RedBird Capital, plus $54 billion of debt commitments from banks including Bank of America, Citi, and Apollo.

However, the board highlighted that Paramount’s latest offer included an equity commitment backed by the Lawrence J Ellison Revocable Trust, whose assets and liabilities are not publicly disclosed and could be withdrawn at any time. Warner Bros argued that this trust does not replace a secured commitment from a controlling shareholder.

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Affinity Partners Withdraws Support

The board’s rejection followed the withdrawal of Affinity Partners, which had been a key source of funding for Paramount’s bid. The firm cited changing investment dynamics and confirmed it would no longer pursue the opportunity. The amount Affinity Partners was contributing was not disclosed in SEC filings.

“With two strong competitors vying to secure the future of this unique American asset, Affinity has decided no longer to pursue the opportunity,” the firm stated.

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Regulatory and Market Implications

Paramount and Netflix have both cited regulatory considerations in their bids. The Ellisons suggested their relationship with President Donald Trump could facilitate smoother regulatory approval for Paramount. Netflix, meanwhile, has assured regulators in the U.S. and Europe that it will continue releasing Warner Bros films in cinemas to ease antitrust concerns.

On Wall Street, the announcement sent Paramount Skydance shares tumbling 3.8%, Warner Bros Discovery down 0.4%, while Netflix stock surged 2.8%.

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Warner Bros Board Statement

Warner Bros Discovery’s board emphasized that Paramount’s offer was conditional, complex, and uncertain, relying on a seven-party structure with cross-conditional agreements. The Ellison Revocable Trust, providing 32% of the equity, had a capped liability of $2.8 billion, creating potential risk if assets were withdrawn before deal completion.

Chairman Samuel Di Piazza said that a shareholder vote on the Netflix deal is expected in spring or early summer of 2026.

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Netflix’s Position

Netflix co-CEOs Ted Sarandos and Greg Peters reiterated that their merger agreement represents the “superior” option for shareholders, offering a binding and fully financed agreement. Netflix has engaged with both the US Department of Justice and the European Commission regarding antitrust approvals.

“The Warner Bros Discovery Board reinforced that Netflix’s merger agreement is superior and that our acquisition is in the best interest of stockholders,” Sarandos said.

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Key Takeaways

• Warner Bros Discovery rejected Paramount Skydance’s $108.4 billion hostile takeover bid.
• The board cited misleading claims about financing and risks associated with the deal.
• Paramount’s offer relied on the Ellison Revocable Trust and complex debt structures.
• Netflix’s $27.75 per share deal is fully binding with secured debt commitments.
• Affinity Partners, backing Paramount, withdrew from the deal, further weakening the bid.
• Wall Street responded with stock volatility: Paramount down, Netflix up.