Warner Bros. rejects Paramount’s hostile bid, accuses Ellison family of failing to put money into the deal

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Warner Bros. Discovery has firmly turned down Paramount’s takeover attempt. They claim the $108 billion deal is too risky because the Ellison family hasn’t committed enough of their own funds to actually buy Warner’s film studio, HBO, and CNN.

Warner Bros. Discovery claims Paramount has repeatedly given its shareholders a false impression that the Ellison family has firmly committed to fully funding their deal, according to a letter filed with the Securities & Exchange Commission on Wednesday.

“It does not, and never has,” the Warner board said.

Warner was waiting for Paramount to officially confirm that the Ellison family would provide the necessary funds for the acquisition. Paramount had already informed Warner shareholders they would receive $30 per share – a total of $78 billion for the entire company – and also take on Warner’s debt, bringing the deal’s total value to $108 billion.

A Paramount representative was not immediately available for comment Wednesday.

Things have gotten really messy in the Warner Bros. sale. Just when it seemed Netflix had locked down the deal for a whopping $72 billion – grabbing Warner Bros. film and TV, HBO, and HBO Max – Paramount decided they weren’t going down without a fight. They’ve launched what can only be described as a hostile takeover attempt, clearly unhappy with losing the bidding war. The Warner Bros. board did unanimously approve the Netflix offer on December 4th, but Paramount’s move suggests this isn’t over yet.

The Warner board sent a letter restating its belief that Netflix’s offer is the most beneficial option for its investors. They also advised shareholders not to accept any offers from Paramount.

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Okay, so Larry Ellison, the guy behind Oracle, really went for it – he tried to buy Warner Bros. Discovery. But Netflix swooped in and won the deal, and honestly, I’m hearing it’s not over. It looks like we’re headed for a legal battle, and the outcome could completely change how Hollywood operates going forward. It’s a huge power play, and I’m definitely keeping my eyes on this one.

Board members expressed concerns about the stability of Paramount’s funding and weren’t fully convinced by the Ellison family’s promises. Warner also pointed out problematic conditions in Paramount’s proposal, including a clause that allowed them to change the offer at any time.

The Warner board argued that its shareholders could be left holding the bag.

Paramount Chairman David Ellison has recently highlighted his company’s financial power, revealing that a proposal to buy all of Warner Bros. Discovery – including popular brands like HBO, CNN, and the Warner Bros. studios – was supported by his family’s wealth. His father, Larry Ellison, the co-founder of Oracle and one of the world’s richest people, is the head of the family.

Last week, in a letter to investors seeking their backing, Ellison explained that Paramount received a financial commitment from the Ellison family trust, which holds assets worth over $250 billion, including more than 1 billion shares of Oracle.

Paramount revealed in official documents that it was seeking $24 billion from investment funds controlled by the royal families of Saudi Arabia, Qatar, and Abu Dhabi, and another $11.8 billion from the Ellison family, who are major shareholders in Paramount, to fund a deal. This week, Affinity Partners, a private equity firm led by Jared Kushner, son-in-law of former President Trump, withdrew from the group financing the deal.

Paramount’s bid would also need more than $60 billion in debt financing.

Hollywood Inc.

Movie theater owners are worried that if Warner Bros. is bought by another big media company, it could lead to even fewer movies being made, especially after the recent challenges the film industry has faced.

Paramount has made six offers to buy Warner Bros. Their latest offer includes a $40.65 billion investment, but the Ellison family, who have a stake in Warner Bros., are not contributing any funds to it, according to the Warner Bros. board.

The board stated that the proposal asks shareholders to depend on a vague and potentially changeable trust to guarantee the necessary funding for this important agreement.

During the deal talks, Paramount (ticker: PSKY) couldn’t demonstrate a firm financial commitment from Larry Ellison, even though Warner’s financial advisors had made it clear that one was needed, according to the board.

Even though the Ellison family has significant financial resources and previously indicated they would support the deal during our discussions, they have decided not to guarantee the PSKY offer, according to the Warner board.

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Paramount revealed they made a final offer of $30 per share late last week. According to Paramount Chairman David Ellison, they didn’t receive a response.

Board members pointed out that a revocable trust isn’t permanent and can be altered at any time. They stated in a letter that it doesn’t offer the same solid guarantee as a firm commitment from a major shareholder.

David Ellison maintains that Paramount’s offer of $30 per share, made on December 4th, was better than the bid Netflix ultimately won with. Paramount is interested in acquiring all of Warner Bros. Discovery, whereas Netflix has agreed to purchase Warner’s studio facilities, its Burbank lot, and the HBO and HBO Max streaming services.

Paramount’s lawyers have argued that Warner tipped the auction to favor Netflix.

Paramount, previously on good terms with President Trump, has consistently maintained that its proposed deal is likely to be approved by regulators. While the Department of Justice under Trump would review the deal for any antitrust concerns, Trump has historically expressed positive opinions about the people involved.

Hollywood Inc.

Once the agreement is finalized on August 7th, Wall Street and media professionals will be focused on these key things.

However, Warner’s board argued that Paramount might be providing too rosy a view.

The Warner board stated that, contrary to what PSKY has publicly claimed, they don’t see a significant difference in the potential regulatory hurdles between the PSKY offer and the merger with Netflix. They explained that they thoroughly reviewed the federal, state, and international regulatory risks of both deals with the help of their legal advisors.

The board acknowledged that Netflix has committed to paying a record $5.8 billion if regulators block their deal.

Paramount has offered a $5 billion termination fee.

If Warner decides to call off the deal with Netflix, it would have to pay a $2.8 billion penalty.

Hollywood Inc.

The entertainment industry in Hollywood has struggled recently due to the COVID-19 pandemic and the writers’ and actors’ strikes. Industry analysts believe a potential merger between two large companies could lead to further layoffs.

I’ve been following the changes at Paramount closely, and it’s clear they’re serious about streamlining things. Warner highlighted their commitments to investors – they’re aiming to cut a massive $9 billion in costs across the combined companies. In fact, since the Ellison family and RedBird Capital Partners took over in August, Paramount has already begun reducing expenses, with $3 billion in cuts already underway. It’s a big shift, and I’m watching to see how it plays out.

Paramount has promised another $6 billion in cuts should it win Warner Bros.

The Warner board stated that these goals are challenging to achieve and would ultimately harm, rather than help, Hollywood.

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2025-12-17 15:32