Warner Bros. plans to reject Paramount offer next week

Warner Bros. set to snub Paramount again, holds out for higher bid despite Ellison backing

• Warner Bros. plans to reject Paramount's amended takeover bid again
• Board prefers Netflix's offer, citing better terms and fewer debt concerns
• Paramount's bid includes $40.4B equity guarantee from Larry Ellison

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Warner Bros. Discovery Inc. plans to once again reject a takeover bid from Paramount Skydance Corp. after the rival media company amended the terms of its offer, according to people familiar with the company’s thinking.

The Warner Bros. board hasn’t made a final determination, but will meet next week, said the people, who asked to not be identified discussing internal deliberations. Among the board’s concerns, Paramount has yet to increase its offer, which Warner Bros. earlier rejected as inferior to one from Netflix Inc.

Paramount, the owner of its namesake studio and MTV, has been waging a public campaign to gather support for its proposal to buy Warner Bros., which owns HBO and CNN. Paramount went public with a $30-a-share cash bid on Dec. 8, three days after Warner Bros. accepted the deal with Netflix, which is only buying Warner Bros.’ studio and streaming businesses. Paramount has since amended its offer twice, most recently by including an assurance from billionaire Larry Ellison that he would personally guarantee $40.4 billion in equity financing and other commitments.

Paramount is controlled by Larry Ellison and his son David, a movie producer now assembling a media empire. The Ellisons took control of Paramount in August and have since submitted multiple bids for Warner Bros., which would give their undersized company another of Hollywood’s original studios and more scale in streaming.

The Warner Bros. board remains unmoved and is waiting for Paramount to increase the financial terms of its offer, said the people. Several shareholders have said they expect Paramount to offer more money. The board is also concerned that the Paramount deal won’t allow the company to manage its debt without the Ellisons’ approval and that Paramount hasn’t guaranteed that it would cover the breakup free that Warner Bros. would have to pay Netflix.

Warner Bros. has argued in public filings that it believes the Netflix offer is superior to the Paramount for a number of reasons, including that Paramount will be heavily indebted and plans to cut more jobs. Netflix is the most valuable company in Hollywood with a market value of more than $400 billion.