The board of Warner Bros. Discovery (WBD) has rejected Paramount’s revised takeover bid for a second time, reaffirming its preference for an existing deal with Netflix and warning shareholders that Paramount’s proposal carries excessive risk.
In a letter to shareholders on Wednesday, January 7, 2026, the WBD board described Paramount’s latest offer as inadequate and fraught with uncertainty, despite claims by Paramount that it had addressed key concerns raised by Warner Bros. executives.
The board characterized Paramount’s bid as closely resembling a leveraged buyout, relying heavily on borrowed funds to complete the transaction. Paramount, which is significantly smaller than WBD, would need to assume more than $50 billion in additional debt through multiple financing arrangements to acquire the company.
This structure poses materially more risk for WBD and its shareholders, the board stated, contrasting it with what it called the certainty of the Netflix merger. The Netflix deal is valued at $27.75 per share, including $23.25 in cash with the remainder in Netflix stock.
Paramount has attempted to ease financing concerns by highlighting backing from Oracle billionaire Larry Ellison, who is helping bankroll the proposed takeover. His son, David Ellison, Paramount’s chief executive officer (CEO), sparked the bidding war last year with an unsolicited approach for WBD’s assets, including CNN.
Following that bid, WBD, led by CEO David Zaslav, launched a formal auction process and ultimately accepted Netflix’s offer. Paramount later went public with a higher offer of $30 per share after being rebuffed by the WBD board.
The board has continued to insist that Paramount’s proposal is inferior, citing both the scale of debt involved and what it described as onerous conditions attached to the offer. Another key issue involves the valuation of WBD’s cable television assets, which are not included in the Netflix deal.
These assets, including CNN, are set to be spun off into a separate publicly traded company called Discovery Global later this year. While the WBD board believes Discovery Global could hold significant standalone value, Paramount has reportedly valued the unit at just $1 per share.
When Paramount first launched its hostile bid, WBD dismissed the proposal as illusory and raised concerns about financing expected to come from investors linked to Saudi Arabia, Qatar and Abu Dhabi. In response, Paramount announced on December 22, 2025, that Larry Ellison would personally guarantee the $40.4 billion he is contributing toward the proposed $78 billion transaction.
Paramount also increased its breakup fee to $5.8 billion, matching Netflix’s agreed penalty, but did not raise its $30 per share offer beyond the initial increase.
With the board’s latest rejection, Paramount now faces strategic choices: walk away, increase its bid, or take the fight directly to WBD shareholders. Because the offer is hostile, Paramount could still seek a shareholder vote that might override the board’s recommendation if investors find the proposal more attractive.
The takeover battle represents one of the most significant merger attempts in the entertainment industry, involving major media assets and competing visions for consolidation in streaming and traditional media. The outcome will shape the competitive landscape as media companies navigate the transition from cable television to digital distribution.
Netflix’s position as the preferred acquirer reflects confidence in its financial stability and established market position in streaming. Paramount’s challenge involves convincing WBD shareholders that higher per share value outweighs concerns about debt levels and execution risk.
