Warner Bros. Discovery wants its shareholders to reject Paramount’s latest offer

Source: The Verge

Overview

Though Paramount Skydance was trying to buy Warner Bros. Discovery for much more money than Netflix is offering, David Zaslav and the rest of WBD’s board are urging their shareholders to give Oracle scion David Ellison the cold shoulder.

Today, WBD’s board announced that it has unanimously decided to reject Paramount Skydance’s hostile bid. The board’s statement emphasized that the offer “does not reflect the true value of Warner Bros. Discovery” and that the company “remains focused on delivering long‑term value for shareholders.”

Key points from the board’s response

• Valuation concerns: The board argues that the proposed price undervalues WBD’s extensive content library, streaming platforms, and international assets.
• Strategic vision: WBD’s leadership highlighted ongoing initiatives to strengthen its streaming services, expand international distribution, and invest in original content.
• Shareholder alignment: The board urged shareholders to consider the broader strategic roadmap rather than a short‑term premium offered by the bid.

Background

Paramount Skydance, led by David Ellison, presented an offer that would have combined Paramount’s film and TV assets with Skydance’s production capabilities, aiming to create a larger media conglomerate capable of competing with industry giants like Netflix and Disney. The proposal came amid a broader wave of consolidation in the entertainment sector, as companies seek scale to offset rising production costs and fragmented audiences.

Market reaction

Following the board’s rejection, Warner Bros. Discovery’s stock experienced a modest uptick, while Paramount Global’s shares fell. Analysts noted that the decision could signal confidence in WBD’s current strategic direction, but also highlighted the uncertainty surrounding the company’s ability to achieve profitability in the increasingly competitive streaming landscape.

What’s next for Warner Bros. Discovery?

• Continued focus on streaming: WBD plans to double down on its HBO Max and Discovery+ platforms, aiming for subscriber growth through original programming and strategic partnerships.
• Cost‑optimization measures: The company is expected to pursue further cost‑cutting initiatives to improve margins, including potential layoffs and restructuring of underperforming divisions.
• Potential future deals: While the board rejected this particular offer, WBD remains open to exploring strategic partnerships or acquisitions that align with its long‑term vision.

Outlook

The board’s unanimous rejection underscores a broader industry trend where media companies are cautious about hostile takeovers that may disrupt long‑term strategic plans. As the streaming wars intensify, Warner Bros. Discovery appears committed to navigating the market on its own terms, focusing on content quality, international expansion, and operational efficiency.