Warner Bros. Discovery’s (WBD) board has told shareholders in a letter to reject Paramount Skydance’s (PSKY) takeover bid, saying that it reflects inadequate value, and maintaining that the Netflix (NFLX) bid is of superior and more certain value.
“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,” said WBD Board Chair Samuel A. Di Piazza, Jr.
“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,” he added.
The letter reiterated that the Paramount bid comes with “significant risks and costs” for WBD, and that it does not come with a “full backstop” from the Ellison family. The deal also remains nonbinding, as opposed to Netflix’s binding offer.
WBD, PSKY and NFLX are -2%, -1% and +1.5% premarket.