WBD Surges as Paramount Amends Hostile Bid With Ellison's $40B Backing
The revised $30-per-share all-cash offer directly counters a board-accepted deal with Netflix and aims to resolve earlier financing concerns.
Shares of Warner Bros. Discovery (WBD) jumped in Tuesday trading after Paramount and its partner Skydance Media dramatically escalated their hostile takeover bid, securing a $40.4 billion personal guarantee from Oracle co-founder Larry Ellison to back their all-cash offer.
The move marks a high-stakes turning point in the gripping battle for the media giant. Warner Bros. Discovery's board had previously accepted an $82.7 billion cash-and-stock offer from Netflix for its streaming and studio assets. Paramount's fortified bid is for the entire company, not just certain divisions, setting up a direct shareholder showdown.
Warner Bros. Discovery stock rose 3.47% to $28.74 on the news, trading near its 52-week high of $30.00. The market's reaction signals a newfound confidence in the viability of Paramount’s pursuit, which the WBD board had rejected as recently as December 17, citing concerns over an "unsecured revocable trust commitment" for the financing.
Paramount's amended offer, detailed in a press release, is a direct and forceful rebuttal to those doubts. The $30-per-share proposal, valuing WBD's equity at approximately $74.4 billion, is now supported by Ellison's irrevocable guarantee. To further sweeten the deal and signal its seriousness, Paramount also increased its proposed regulatory reverse termination fee to $5.8 billion.
The entrance of Ellison, a titan of the technology industry, fundamentally alters the bid's dynamics. His personal financial commitment injects a level of certainty and credibility that was previously the offer's primary weakness. It puts immense pressure on WBD's board to re-evaluate the Paramount offer against the already-accepted Netflix deal, which involves a more complex mix of cash and stock for only a portion of the company.
This corporate clash presents two divergent futures for Warner Bros. Discovery. A deal with Netflix would see its prized content engine—including the Warner Bros. film studio and HBO—absorbed by the streaming behemoth. The Paramount deal, in contrast, would combine two legacy media giants to create a consolidated competitor with the scale to challenge Netflix and Disney across streaming, theatrical releases, and traditional television.
Analysts have noted that either combination would face significant regulatory scrutiny. However, the all-cash, fully guaranteed nature of Paramount's hostile bid may now be viewed by shareholders as a cleaner and potentially more lucrative exit compared to the partial Netflix acquisition.
The next move belongs to Warner Bros. Discovery's board, which must now weigh its fiduciary duty to shareholders against its prior agreement with Netflix. With Paramount extending its tender offer to January 21, the stage is set for a dramatic conclusion to one of the most consequential media consolidation battles in recent memory.