Warner Bros Discovery is expected to urge its shareholders to reject Paramount Skydance’s $108.4 billion (£80.75 billion) takeover bid, as early as Wednesday, according to multiple media reports, marking a major escalation in one of the most closely watched corporate battles in the global media and entertainment industry.
The reported move comes despite Paramount Skydance describing its offer as a “superior proposal” when compared to the $72 billion agreement Warner Bros Discovery reached with Netflix, which covers significant portions of its film and streaming businesses. The contrasting valuations and strategic visions have deepened tensions between the companies, raising fresh questions about the future structure of one of the world’s most influential media groups.
According to the Financial Times, Warner Bros Discovery plans to recommend that investors vote against the Paramount Skydance bid, citing serious concerns about the financing structure behind the proposed acquisition. Sources familiar with the matter suggest the company’s board is unconvinced that Paramount Skydance has secured sufficiently stable and credible funding to complete a deal of such magnitude without exposing shareholders to heightened financial risk.
Paramount Skydance, which has been seeking to consolidate its position within the rapidly evolving media landscape, has argued that its proposal offers greater long-term value and strategic flexibility than Warner Bros Discovery’s agreement with Netflix. The company believes that combining assets would create a stronger competitor capable of navigating declining traditional television revenues and intensifying competition in the streaming market.
However, Warner Bros Discovery’s leadership appears determined to stand by its Netflix deal, which was announced on 5 December. That agreement involves the sale of the company’s film and streaming operations and is increasingly seen as central to its resistance to Paramount’s takeover approach. Industry analysts suggest the Netflix transaction provides Warner Bros Discovery with immediate financial clarity and strategic certainty, factors that may outweigh the higher headline valuation offered by Paramount Skydance.
Complicating matters further, Affinity Partners, a key financial backer of Paramount Skydance’s bid, has reportedly withdrawn its support. Affinity Partners is an investment firm founded by Jared Kushner, the son-in-law of former US President Donald Trump. According to reports, the firm pulled out due to concerns about the presence of “two strong competitors” involved in the deal, a development that has further weakened confidence in the bid’s viability.
The reported withdrawal of Affinity Partners has raised fresh doubts among investors and market observers about Paramount Skydance’s ability to assemble the capital required for a transaction of this scale. Financing uncertainty has long been a critical factor in major mergers and acquisitions, particularly in capital-intensive sectors such as media, where debt levels, content investment and long-term profitability remain under intense scrutiny.
Warner Bros Discovery declined to comment when contacted about the reports. Paramount Skydance and Affinity Partners have also been approached for responses but had not issued formal statements at the time of publication.
The media conglomerate formally put itself up for sale in October, after receiving what it described as “multiple” expressions of interest from potential buyers. Among those suitors was Paramount Skydance, whose bid quickly emerged as one of the most prominent and ambitious offers on the table.
The sale process has unfolded against a backdrop of significant transformation in the global entertainment industry. Traditional studios and broadcasters are under pressure from shifting consumer habits, declining cable subscriptions and rising production costs, while streaming platforms continue to battle for subscriber growth and profitability.
Warner Bros Discovery, formed from the 2022 merger between WarnerMedia and Discovery, has been grappling with debt reduction and portfolio optimisation. The decision to sell parts of its business to Netflix was widely interpreted as a strategic attempt to streamline operations, strengthen its balance sheet and focus on core assets.
By contrast, Paramount Skydance’s takeover bid represents a more expansive consolidation strategy, aiming to bring together content libraries, production capabilities and distribution networks under a single corporate umbrella. Supporters of the deal argue that scale is essential for survival in the modern media environment, where competition from global streaming giants has reshaped audience expectations and revenue models.
Nevertheless, critics caution that mega-mergers carry significant execution risks, including cultural integration challenges, regulatory scrutiny and potential dilution of shareholder value. These concerns appear to have weighed heavily on Warner Bros Discovery’s board as it prepares to advise shareholders.
Market reaction to the unfolding developments has been mixed, with investors closely monitoring signals from both companies. Analysts note that a formal recommendation by Warner Bros Discovery to reject the bid could significantly diminish Paramount Skydance’s chances of success, particularly if financing uncertainties persist.
As the situation continues to evolve, shareholders face a pivotal decision that could reshape the future of one of Hollywood’s most storied institutions. The outcome will not only determine ownership structures but may also influence broader trends in media consolidation and strategic partnerships worldwide.
For now, attention is firmly focused on the expected shareholder guidance and whether Paramount Skydance will revise its approach, secure alternative funding, or walk away from the deal altogether.
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