Warner Bros Discovery tells investors to reject latest $108bn hostile Paramount bid | Warner Bros

Warner Bros Discovery (WBD) has once again told its shareholders to reject an “inadequate” $108.4bn (£80bn) hostile takeover bid from Paramount Skydance, amid an extraordinary corporate fight for control of the media conglomerate.

Paramount, controlled by the billionaire Ellison family, has sought to combat WBD’s criticism of its bid, claiming it has “consistently misled” investors by saying it had “full support” from the Ellisons – a safety net that would ensure it had adequate funding.

Oracle co-founder Larry Ellison agreed last week to provide personal guarantees worth more than $40 billion. Paramount said this was an attempt to address WBD’s “unformed need” for financial flexibility.

Paramount is struggling to unravel WBD’s $82.7 billion deal with Netflix, in which the world’s largest streaming service aims to acquire WBD’s established movie studios, HBO cable network and HBO Max streaming service.

Unlike Netflix, Paramount bid for the entire company, which includes CNN, Cartoon Network and Discovery Channel. But WBD’s board argued that its offer was “inadequate” and carried “significant” risks and costs.

“Your board of directors has unanimously determined that the amended offer is inadequate, particularly given the insufficient value it will provide, the uncertainty in Paramount Skydance’s ability to complete the offer, and the risks and costs that WBD shareholders will bear if Paramount Skydance is unable to complete the offer,” WBD said in a letter to shareholders on Wednesday.

In a filing accompanying the letter, WBD called the hostile bid the “largest LBO” despite new Ellison support. [leveraged buyout] The “in history” proposal is a structure that poses risks.

According to the terms of its agreement with Netflix, WBD will have to pay a breakup fee of $2.8 billion if it withdraws from the agreement.

Paramount Skydance’s revised offer also included increasing the termination fee to $5.8 billion, matching Netflix’s.

Netflix’s deal with Warner Bros. studios, HBO and HBO Max, and Paramount’s approach to the entire WBD, are expected to face strong regulatory scrutiny. Prominent lawmakers and entertainment industry operators have voiced concerns, and Donald Trump has also indicated he plans to get involved.

Ted Sarandos and Greg Peters, co-CEOs of Netflix, said: “WBD’s board continues to fully support and recommend Netflix’s merger agreement, recognizing it as a superior proposal that will deliver the greatest value to its shareholders, as well as consumers, creators and the broader entertainment industry.

“Netflix and Warner Bros. will bring together immensely complementary strengths and a shared passion for storytelling. By joining forces, we will offer audiences more of the shows and movies they love, in and around the home.” [cinemas] – expand opportunities for creators and help support a dynamic, competitive and thriving entertainment industry.”