
Warner Bros. Discovery has told its shareholders they should reject Paramount Skydance's $108.4 billion takeover bid for the company, urging them to approve the Netflix deal instead.
A post on Warner Bros. financial website confirmed that its Board of Directors had decided that Paramount’s bid “is not in the best interests of WBD and its shareholders and does not meet the criteria of a ‘Superior Proposal’ under the terms of WBD's merger agreement with Netflix announced on December 5, 2025.”
Explaining why, Warner Bros. hit out at Paramount, accusing it of consistently misleading its shareholders by saying its bid had a "full backstop" from the Ellison family. "It does not, and never has," Warner Bros. said.
"PSKY's most recent proposal includes a $40.65 billion equity commitment, for which there is no Ellison family commitment of any kind," Warner Bros. continued. "Instead, they propose that you rely on an unknown and opaque revocable trust for the certainty of this crucial deal funding. Despite having been told repeatedly by WBD how important a full and unconditional financing commitment from the Ellison family was – and despite their own ample resources, as well as multiple assurances by PSKY during our strategic review process that such a commitment was forthcoming – the Ellison family has chosen not to backstop the PSKY offer.
"And a revocable trust is no replacement for a secured commitment by a controlling stockholder. The assets and liabilities of the trust are not publicly disclosed and are subject to change. As the name indicates, revocable trusts typically have provisions allowing for assets to be moved at any time. And the documents provided by PSKY for this conditional commitment contain gaps, loopholes and limitations that put you, our shareholders, and our company at risk."
Earlier this week, the private equity firm owned by Donald Trump’s son-in-law, Jared Kushner, pulled its backing for Paramount’s hostile takeover bid, leaving it with the backing of wealth funds run by three governments in the Persian Gulf, widely reported as Saudi Arabia, Abu Dhabi, and Qatar.
Netflix, as you’d expect, welcomed the decision. “The Warner Bros. Discovery Board reinforced that Netflix's merger agreement is superior and that our acquisition is in the best interest of stockholders," said Ted Sarandos, Netflix co-CEO.
"This was a competitive process that delivered the best outcome for consumers, creators, stockholders and the broader entertainment industry. Netflix and Warner Bros. complement each other, and we're excited to combine our strengths with their theatrical film division, world-class television studio, and the iconic HBO brand, which will continue to focus on prestige television. We're also fully committed to releasing Warner Bros. films in theaters, with a traditional window, so audiences everywhere can enjoy them on the big screen."
Paramount launched its hostile takeover bid for Warner Bros. Discovery soon after Netflix emerged as the winner of a lengthy bidding war with an $82.7 billion deal.
"WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company," Paramount boss David Ellison said in a statement announcing his company's hostile bid. "Our public offer, which is on the same terms we provided to the Warner Bros. Discovery Board of Directors in private, provides superior value, and a more certain and quicker path to completion.
"We believe the WBD Board of Directors is pursuing an inferior proposal which exposes shareholders to a mix of cash and stock, an uncertain future trading value of the Global Networks linear cable business and a challenging regulatory approval process. We are taking our offer directly to shareholders to give them the opportunity to act in their own best interests and maximize the value of their shares.”
The hostile takeover has now failed, however, leaving Netflix with a path towards completing the buyout. However, Netflix’s proposal has sparked a tough response from some members of Congress, and it is expected to face significant scrutiny under antitrust laws. Meanwhile, at least one HBO Max subscriber has already sued Netflix, claiming the deal threatens to reduce competition in the U.S. subscription video-on-demand market.
Warner Bros.-owned streaming platform HBO Max includes everything from Game of Thrones to Harry Potter, James Gunn's DC Universe to Barbie, and its content is expected to be added to Netflix if and when the deal goes through.
After its announcement, Netflix sent subscribers an email of reassurance amid concern over potential price rises. The email — reviewed by IGN — promised subscribers that nothing was changing “today,” and confirmed that HBO Max and Netflix would continue to operate separately until the deal closes. It did not rule out future price rises, but did promise that current membership plans would remain in place at least until the deal goes through. As for when that will be, Netflix said it expects to close the transaction in 12-18 months — so, at the earliest December 2026, but it could be as late as summer 2027.
In an investor call attended by IGN, Netflix chief Ted Sarandos struck a confident tone when asked about the deal’s chance of success. "We're highly confident in the regulatory process," he said. "This deal is pro-consumer, pro-innovation, pro-worker, it's pro-creator, it's pro-growth.”
As part of the same call, Sarandos said Netflix would continue to release Warner Bros. movies in theaters for now, though expected theatrical release windows to shorten over time to become "more user friendly."
One report has claimed Netflix is particularly keen to obtain Warner Bros.' vast content library as the streamer ramps up its potential to offer AI-generation tools and content in the future.
Photo by Anna Barclay/Getty Images.
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.