Warner Bros may reject Paramount’s latest hostile bid worth $108 billion despite Larry Ellison guarantee: Report

Warner Bros. Discovery will likely reject Paramount Skydance’s modified $108.4 billion hostile bid for the Hollywood studio, despite a personal guarantee from billionaire Larry Ellison that he supports the media giant’s bid, according to a person familiar with the matter.

The person, who wished to remain anonymous, said the board has not yet made a final decision but is expected to meet next week.

Warner Bros. and Paramount declined to comment on the board’s stance, as previously reported. CNBC.

The decision could keep Warner Bros. on track to strike a rival cash-and-stock deal with Netflix, despite Paramount’s attempt to soften its offer.

Ellison, whose son David is chairman and CEO of Paramount, personally guaranteed the equity underlying the bid, hoping to allay doubts that had dogged his earlier bid.

The company did not raise its $30-per-share cash offer, but did increase the regulatory reverse termination fee to accommodate Netflix and extended the tender offer deadline.

Netflix’s $82.7 billion bid has a lower headline value but offers a clearer financing structure and less execution risk, analysts said.

Under the terms of this agreement, Warner Bros. will face a breakup fee of $2.8 billion if it withdraws from the Netflix deal.

Harris Oakmark, Warner Bros’ fifth largest investor with 96 million shares, said the revised offer was not “sufficient” and noted that it was not enough to cover the separation fee.

Paramount argued that its proposal would face fewer regulatory hurdles. A combined Paramount-Warner Bros. entity would create a studio larger than industry leader Disney and combine two major television operators.

Warner Bros.’ board had previously urged shareholders to reject Paramount’s $108.4 billion bid for the entire company, including its cable television assets, citing concerns about the certainty of financing and the lack of a full guarantee from the Ellison family.

Paramount has argued that its offer is more market-proof than Netflix’s $82.7 billion offer, whose value fluctuates with Netflix’s share price.

Lawmakers from both parties have expressed concerns about further consolidation in the media sector. US President Donald Trump said that he plans to focus on this important purchase.