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Warner Bros. Discovery’s board unanimously recommended rejecting Paramount Skydance’s amended tender offer on January 7, 2026, calling it inferior to WBD’s Netflix merger agreement. The board described Paramount’s proposed financing as “in effect a leveraged buyout,” citing its own estimates of $87 billion in pro forma gross debt and roughly 7x gross leverage before synergies. That rejection was not the end of the story: Paramount later completed its takeover of WBD on October 6, 2026.
Why did Warner Bros. Discovery reject Paramount’s bid?
WBD’s board said the amended offer, made on December 22, 2025, was not in shareholders’ best interests and did not meet the “Superior Proposal” standard in WBD’s merger agreement with Netflix. Its recommendation was unanimous. The board’s position was that the Netflix agreement was preferable across key terms, including financing and the risks of getting the transaction closed. WBD’s January 7, 2026 statement set out that case.
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Venture Bros.: Radiant is the Blood of the Baboon Heart (Blu-ray) | $10.89 | Buy on Amazon |
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Maverick (BD) | $11.99 | Buy on Amazon |
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Maltese Falcon, The (4K Ultra HD + Blu-ray) | $17.99 | Buy on Amazon |
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WB 100th 25Film Collection Vol 1 Award Winners (Blu-ray) | $199.00 | Buy on Amazon |
The board’s objections were about more than the headline offer price. WBD raised concerns about financing commitments, potential obligations if the transaction failed, operating restrictions while a deal was pending, regulatory and closing risk, and whether shareholders would retain an interest in a separated linear-networks business. Those were WBD’s arguments for preferring its Netflix agreement, not independent findings about the merits of either offer.
What did WBD mean by “leveraged buyout”?
A leveraged buyout is an acquisition financed substantially with borrowed money. The buyer uses debt as part of the purchase financing, leaving the acquired business and combined company with debt obligations to service. WBD used the term to characterize Paramount’s proposed financing structure, not as a neutral ruling on the offer.
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WBD’s debt and leverage estimates
In its January 7, 2026 recommendation statement, WBD’s board estimated that the proposed transaction would leave the combined company with $87 billion in total pro forma gross debt and approximately 7x gross leverage measured against 2026E EBITDA before synergies. These are WBD’s estimates for the proposed transaction, not independently established or realized debt figures.
The board argued that this level of debt, alongside reliance on lenders, could make closing less certain. It also objected to restrictions it said would constrain WBD’s operations before closing. Both points were part of the board’s case for rejecting Paramount’s proposal.
How did Paramount defend its offer?
On January 8, 2026, Paramount reaffirmed a fully financed, all-cash offer of $30 per share. Paramount said it had addressed WBD’s financing concerns, including by providing a personal guarantee from Larry Ellison for the equity financing. Chairman and CEO David Ellison said, “Our offer clearly provides WBD investors greater value and a more certain, expedited path to completion.” Those value and certainty claims were Paramount’s, not an independent comparison. Paramount’s January 8 statement describes its position.
The competing arguments therefore turned on both consideration and execution risk: WBD said the Netflix agreement was superior under its merger agreement, while Paramount said its all-cash proposal offered more value and a clearer route to closing. A $30-per-share headline alone does not settle that comparison; the financing, obligations if a deal failed, interim restrictions, regulatory path and treatment of the linear-networks business were also at issue.
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- Maverick [Blu-ray]
- PHYSICAL_MOVIE
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Did Paramount eventually buy Warner Bros. Discovery?
Yes. The January rejection was an earlier episode in a contest that later proceeded to completion. The Associated Press reported that Paramount Skydance completed its takeover of WBD on October 6, 2026, and that the combined company would be known as Skydance. An AP report dated September 30 said a federal judge had approved Paramount’s settlement with 12 states and that the companies expected to close on October 6. AP’s September 30 report covered the settlement approval; its October 7 report covered the completed takeover.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How should the reported deal values be read?
AP described the completed takeover as an $81 billion deal and separately reported that the acquisition amount including billions of dollars in debt came to nearly $111 billion. These are distinct reported formulations with different bases; they should not be treated as interchangeable prices or combined into one figure.
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- Item name: The Maltese Falcon
- Product type: PHYSICAL MOVIE
- Brand: WB
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