The board of directors of Warner Bros. Discovery (WBD) has unanimously rejected the takeover bid made by Paramount Skydance, considering that it does not benefit its shareholders or improve the merger agreement signed with Netflix, the entertainment group said Wednesday in a statement.
For this reason, the board recommends its shareholders not to participate in the Paramount takeover bid and also defends the merger agreement with Netflix.
According to the chairman of the board, Samuel A. Di Piazza, after a “careful evaluation” of Paramount’s takeover bid, it has been concluded that its value is “insufficient” and entails “significant risks and costs”.
“This offer does not address the major concerns we have consistently communicated to Paramount during our extensive collaboration and review of their previous proposals,” Di Piazza notes in a statement.
He also says he is confident that Warner’s merger with Netflix “represents superior and more secure value for our shareholders,” and expects to “take full advantage of the attractive benefits of our combination.”
The board also questions the documents provided by Paramount in this matter, stating that they present “gaps, loopholes and limitations” that put the company and its shareholders at risk.
Warners rules out Paramount… Netflix triumphs?
In contrast, they stress, the Netflix merger is backed by a company with more than $400 billion in market capitalization.
WBD reached an agreement with Netflix earlier this month to sell the company for $82.7 billion, including debt, after which Paramount entered the picture with a $108 billion hostile takeover bid.
Netflix had agreed to pay $27.75 per share, in a combination of cash and stock, for Warner Studios and streaming service HBO Max.
Paramount, for its part, offered $30 in cash for the entire company.
The fight between the two giants has opened the door to greater business concentration in a sector already dominated in the United States by a handful of large groups that bring together film, media, television and streaming.
In pre-opening trading on Wall Street, Netflix shares were up 1.6%, while Paramount shares were down 2%, reported Agencia EFE.
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