Paramount Ramps Up Hostile Takeover Bid for Warner Bros Discovery
Paramount continues its aggressive push to acquire Warner Bros Discovery. The company has filed a lawsuit and plans a proxy fight. This move directly challenges Netflix's proposed merger with WBD.
Legal and Boardroom Battle Unfolds
On Monday, January 12, Paramount filed a lawsuit against Warner Bros Discovery. The lawsuit seeks financial details about WBD's $82.7 billion agreement with Netflix. Paramount also plans to nominate its own directors to WBD's board. These directors would vote against the Netflix merger at the upcoming shareholder meeting.
Paramount maintains its $108.7 billion all-cash offer is superior to Netflix's deal. For months, both Netflix and Paramount have tried to finalize a deal for WBD's studios and content library. Any successful acquisition would rank among the largest media deals in history. So far, WBD's board has rejected Paramount's offers. The board advises shareholders to support the Netflix agreement.
Why Warner Bros Discovery is For Sale
Warner Bros Discovery faces declining ratings and revenue. The company plans to split into two separate businesses. This move essentially reverses its 2022 merger. The split will create two entities.
- Warner Bros: This company will include the TV business, the HBO film studio, and the HBO Max streaming service.
- Global Networks Operation: This division will house the Discovery channel, CNN, and Cartoon Network.
In October 2025, WBD announced it was open to a partial or complete sale. This announcement triggered weeks of talks with interested parties, including Netflix and Paramount.
Two Competing Offers on the Table
Netflix focused its negotiations solely on merging with the Warner Bros business. It did not pursue WBD's global networks operation. Paramount, however, presented an offer to acquire the entire WBD company.
On December 5, Netflix announced it had entered an $82.7 billion agreement with WBD. The deal is to acquire the Warner Bros business after the split, likely in the third quarter of 2026. WBD's agreement with Netflix includes a clause prohibiting it from soliciting other offers.
Despite this, Paramount could still raise its bid. Such a move would force Netflix to counter. If WBD were to accept an improved offer from Paramount, it would have to pay Netflix a $2.8 billion termination fee.
Paramount's Hostile Takeover Strategy
Days after Netflix announced its merger, Paramount launched a hostile takeover bid for all of WBD. In a hostile takeover, an acquirer typically employs one of three tactics.
- Directly approach the target company's shareholders with a tender offer.
- Initiate a proxy fight to replace board members with those friendly to the takeover.
- Buy the company's stock on the open market.
On December 8, Paramount chose the first route. It sent an unsolicited all-cash offer of $30 per share to WBD's shareholders. Paramount CEO David Ellison stated this offer provides about $18 billion more in cash than Netflix's cash-and-stock bid, priced at $27.75 per share.
WBD rejected this move. In a December 17 letter to shareholders, WBD noted Paramount's original offer omitted details about its weak finances. It criticized the offer's complex debt-equity structure. A key concern was the lack of a full financial guarantee from Larry Ellison, David Ellison's father and Oracle co-founder.
Larry Ellison's backing came through a revocable trust with undisclosed assets. WBD characterized this as a risk to its shareholders. On December 22, Paramount announced Larry Ellison had agreed to personally backstop $40.4 billion in equity financing. Last week, on January 7, the WBD board unanimously voted against this revised bid. The board called it a risky leveraged buyout that investors should reject.
Now, as part of its proxy fight, Paramount plans to nominate candidates to WBD's board before the crucial shareholder meeting. Paramount hopes this will tilt the odds in its favor and force WBD to engage with its offer.
