Warner Bros. Discovery Rejects Paramount’s Revised Offer, Labels It a “Leveraged Buyout”

The battle over Warner Bros. Discovery and its vast portfolio of film and television assets — including franchises such as Harry Potter, Game of Thrones, and DC Comics — continues, with the company once again rejecting a takeover bid from Paramount and Skydance.

On Wednesday, Warner Bros. Discovery said its board had unanimously rejected Paramount’s revised $108.4 billion proposal, describing the offer as a “leveraged buyout” that would saddle the company with approximately $87 billion in debt.

In a letter to shareholders, WBD urged investors to vote against Paramount’s proposal, warning that the “extraordinary amount” of debt required to finance the transaction significantly increases the risk that the deal will not close. Instead, the company reiterated its support for an earlier $82.7 billion agreement with Netflix involving the sale of its film and television studio assets.

Paramount had been widely rumoured to be a potential buyer of WBD before the Netflix transaction was announced. After Warner Bros. Discovery’s board opted to proceed with Netflix, Paramount bypassed the board and went directly to shareholders in early December with an all-cash offer of $30 per share. WBD rejected the bid, calling it “illusory” and arguing that Paramount lacked the financial capacity to support it, while continuing to recommend the Netflix cash-and-stock deal.

Paramount later returned with additional assurances, including a $40 billion financing guarantee from its CEO David Ellison’s father, Larry Ellison, along with plans to raise $54 billion in debt to fund the acquisition.

Warner Bros. Discovery said those measures were insufficient. In a statement, the company noted that Paramount, with a market capitalisation of roughly $14 billion, was pursuing a transaction that would require $94.65 billion in combined debt and equity financing, which is approximately seven times its market value. WBD said the structure posed substantially greater risks to shareholders than the “conventional structure” of the Netflix deal.

The company also questioned Paramount’s ability to operate effectively following such a highly leveraged acquisition, arguing that the additional borrowing would further strain Paramount’s already “junk-rated” credit profile.

Warner Bros. Discovery highlighted concerns about Paramount’s negative free cash flow, noting that an acquisition of this scale would likely worsen its financial position. By contrast, WBD cited Netflix’s stronger balance sheet, including an approximately $400 billion market capitalisation, investment-grade credit ratings (A/A3), and estimated free cash flow exceeding $12 billion in 2026.

Netflix responded positively to WBD’s decision, saying the merger would unite “highly complementary strengths” and reflect a shared commitment to storytelling.