"Warner Bros. Discovery Inc. is planning to reject Paramount Skydance Corp.'s hostile takeover bid due to concerns about financing and other terms, people familiar with the matter said. After deliberating and reviewing Paramount's bid, Warner Bros.' board will urge shareholders to reject the tender offer, said the people, who asked not to be identified discussing confidential information. The board still views the company's existing agreement with streaming leader Netflix Inc. as offering greater value, certainty and terms than what Paramount has proposed, they said."
"One major sticking point is Warner Bros.' concern about the financing proposed by Paramount, which is led by David Ellison. The equity is backstopped by a trust that manages the wealth of his father, software billionaire Larry Ellison. Because it's a revocable trust, assets can be taken out of it at any time, and Warner Bros. may have no recourse if that happens, the people said. One of Paramount's backers dropped out the deal Tuesday. Affinity Partners, led by President Donald Trump's son-in-law Jared Kushner, told Bloomberg News it was withdrawing from the proposed transaction, citing the involvement of "two strong competitors.""
Warner Bros. Discovery's board plans to urge shareholders to reject Paramount Skydance's hostile tender offer because of concerns about the financing structure and other deal terms. The board views the company's existing agreement with Netflix as offering greater value, certainty and preferable terms. Paramount's proposed equity financing is backstopped by a revocable trust tied to Larry Ellison's wealth, raising fears assets could be withdrawn with little recourse. One of Paramount's backers, Affinity Partners, withdrew from the proposed transaction. The board is also worried about managing the company during a potentially lengthy regulatory review and insufficient operational flexibility under Paramount's offer.
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