NEW YORK (AP) — Warner Bros. is telling shareholders to reject a takeover bid from Paramount Skydance, saying a competing takeover by Netflix would be better for customers.
“The board reviewed Paramount Skydance’s recent unsolicited tender offer with the same care and discipline throughout the process, including a review of multiple prior proposals,” Warner Bros. said Wednesday. “The board’s evaluation followed a thorough and consistent process and was grounded in its fiduciary duties.”
Paramount last week raised hostility to its takeover, asking shareholders to reject a deal with Netflix favored by Warner Bros.’ board.
Paramount offered $30 per Warner share, while Netflix offered $27.75 per share.
Paramount’s bid isn’t entirely out of the question. While Wednesday’s letter to shareholders means Paramount’s takeover proposal is not favored by Warner Bros.’s board of directors, shareholders could still decide to sell their shares in support of Paramount’s bid for the entire company — including cable giants CNN and Discovery.
Unlike Paramount’s bid, Netflix’s offer does not include acquiring Warner Bros.’ cable business. The Netflix acquisition, if approved by regulators and shareholders, would only be completed after Warner completes a previously announced spinoff of its cable TV business.
Paramount claims that before announcing the Netflix deal on December 5, it made six different acquisition offers, all of which were rejected by Warner leadership. It was not until then that Paramount made a direct offer to Warner shareholders.
In addition to shareholder approval, both takeover bids face intense regulatory scrutiny. Warner’s ownership change will completely reshape the entertainment and media industries – affecting movie production, consumer streaming platforms, and Paramount’s news landscape.
Critics of the Netflix deal say merging the giant streaming company with Warner’s HBO Max would give it overwhelming market dominance over the much smaller Paramount+ streaming service.
“This is something we’ve heard for a long time — including when we started the streaming business,” Netflix co-CEOs Greg Peters and Ted Sarandos said in a Warner Bros. filing. “Our position then and now is the same — we view this as a win for entertainment, not the end of it.”
Netflix and Paramount’s bids have sparked alarm over what they could mean for film and TV production. While Netflix agreed to abide by Paramount’s contractual obligations for theatrical distribution, critics pointed to its past business model and reliance on online distribution. However, Paramount and Warner Bros. are two of the only “Big Five” traditional studios left in Hollywood today.
Paramount’s attempt to acquire Warner’s cable networks and news operations would also bring CBS and CNN under the same roof. In addition to further accelerating media consolidation, it could also raise questions about shifts in editorial control — as CBS News saw before and after Skydance’s $8 billion acquisition of Paramount, which closed in August.
Paramount Skydance did not immediately respond to a request for comment from The Associated Press early Wednesday.
U.S. President Donald Trump has publicly signaled his future involvement in the deal, suggesting politics will play a role in regulatory approval.
Trump has previously said the Netflix deal “could be a problem” because it could lead to excessive control of the market. The Republican president is also close to Oracle’s billionaire founder Larry Ellison, the father of the Paramount chief executive and whose family trust has also strongly backed the company’s bid for Warner.
Affinity Partners, an investment firm run by Trump’s son-in-law Jared Kushner, previously said it would also invest in the Paramount deal. But on Tuesday, the company announced it would withdraw from the bidding.
Still, Trump also tends to make decisions based on gut instinct and personal emotion. He continues to publicly blast Paramount’s editorial decisions on CBS’s “60 Minutes.”
“For those who think I am close to the new owners of CBS, please understand that since the so-called ‘takeover,’ 60 Minutes has treated me much worse than they have ever treated me before,” Trump wrote on his platform, Truth Social, on Tuesday. “I hate to see my enemies if they are friends!”