The board of Warner Bros. Discovery has unanimously urged shareholders to reject Paramount’s $108 billion bid for the company.
Earlier this month WBD accepted a rival $82 billion from Netflix following weeks of offers and counteroffers from the streaming giant, Paramount and Comcast.
That decision was followed by Paramount making a direct offer to shareholders which, it argues, is superior to Netflix’s.
Netflix’s $82bn bid, like Comcast’s, is for WBD’s studio and streaming business, which is being formed as part of a recently announced demerger, while Paramount is seeking to take control of the entire business.
The WBD board was obliged to reconsider the Paramount offer and, having now done so, has concluded its “value is inadequate, with significant risks and costs imposed on our shareholders”.
In a statement, Samuel A. Di Piazza, Jr., Chair of the Warner Bros. Discovery Board of Directors, added: “This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of their six previous proposals.
“We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination.”
Netflix has welcome the WBD board’s announcement with co-CEO Ted Sarandos saying: “This was a competitive process that delivered the best outcome for consumers, creators, stockholders and the broader entertainment industry.
“Netflix and Warner Bros. complement each other, and we’re excited to combine our strengths with their theatrical film division, world-class television studio, and the iconic HBO brand, which will continue to focus on prestige television.
“We’re also fully committed to releasing Warner Bros. films in theaters, with a traditional window, so audiences everywhere can enjoy them on the big screen.”
However Paramount is standing by its counter-offer which it insists “will deliver WBD shareholders with superior value and a faster, more certain path to completion than the Netflix transaction.”
David Ellison, the studio’s Chairman & CEO, said: “I have been encouraged by the feedback we have received from WBD shareholders who clearly understand the benefits of our offer.
“We will continue to move forward to deliver this transaction, which is in the best interest of WBD shareholders, consumers, and the creative industries.”