LOS ANGELES, Dec 17 (Reuters) – Warner Bros. Discovery’s board of directors on Wednesday rejected Paramount Skydance’s $108.4 billion hostile bid, saying it did not offer adequate financial guarantees.
In a letter to shareholders released in a regulatory filing, the board wrote that Paramount had “consistently misled” Warner Bros. shareholders by claiming that its $30 per share cash offer was fully guaranteed, or “backed,” by the Ellison family, led by billionaire and Oracle chief executive Larry Ellison.
“That is not the case, and never has been,” the board wrote about Paramount’s bid guarantee, noting that the bid presented “numerous significant risks.”
The Warner Bros board also said it considered Paramount’s offer to be “inferior” to the Netflix merger deal. The streaming giant’s $27.75 per share offer for Warner Bros film and television studios, its estate and the HBO Max streaming service is a binding deal that requires no equity financing and has robust debt covenants, the board wrote.
Last week, Paramount took its case directly to Warner Bros. shareholders, arguing that it had secured “solid financing” to support its bid, with $41 billion in new shares secured by the Ellison family and RedBird Capital, and $54 billion in debt commitments from Bank of America, Citi and Apollo.
Warner Bros. Discovery’s board countered Wednesday that Paramount’s latest offer includes a capital commitment “for which there is no commitment of any kind from the Ellison family,” but rather support from “an unknown and opaque” Lawrence J. Ellison Revocable Trust, whose assets and liabilities are not publicly disclosed and are subject to change.
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Paramount has submitted a total of six proposals to acquire the entire Warner Bros studio, including its television networks, including CNN and TNT Sports.
