Warner Bros. Discovery’s board unanimously urged shareholders to reject a tender offer from Paramount Skydance, calling it insufficient and dangerous while throwing full support behind its proposed merger with Netflix.
In a assertion launched on Wednesday, the board said the Paramount Skydance bid fails to meet the bar of a “superior proposal” under WBD’s merger settlement and can be “terminated or amended” at any time, creating what it called untenable draw back for buyers.
Paramount made a hostile bid to take over Warner Bros. Discovery. Getty Images
“Following a careful evaluation of Paramount’s recently launched tender offer, the Board concluded that the offer’s value is inadequate, with significant risks and costs imposed on our shareholders,” board chair Samuel A. Di Piazza Jr. said.
The board also said the Ellison household has not supplied an “equity backstop” — a firm guarantee that it would make up for any potential collapse in financing — for the bid and argued there is no materials distinction in regulatory risk between the Paramount offer and the Netflix deal.
Warner Bros. Discovery board requested shareholders to settle for the Netflix merger. NurPhoto via Getty Images
WBD said particulars of its resolution are laid out in a Schedule 14D-9 submitting with the Securities and Exchange Commission, as the company presses shareholders to back the Netflix transaction as the “more certain value” path ahead.