Warner Bros downplays Paramount's $108 billion bid in preference to Netflix: Here's why

The war of Warner Bros Discovery acquisition appears to have settled, for now, as Warner Bros. has downplayed Paramount Skydance’s $108.4 billion bid in preference to a $82 billion deal with Netflix.

Why Warner Bros. rejected Paramount's acquisition bid?

Wondering why Warner Bros. rejected Paramount's capitally bigger offer than Netflix? The entertainment titan's board believes Netflix offers greater long-term value and lower risk.

In a unanimous recommendation, Warner Bros Discovery's board outlined the “numerous and significant risks” associated with the Paramount proposal. The board's views also contradict the aspirant's financial superiority.

The decision follows Warner Bros Discovery proclaiming its intent to sell following various expressions of interest, including from Paramount.

On December 5, Warner Bros. confirmed its agreement with Netflix to sell its film studio and streaming business, and later the board emphasised that Paramount's funding structure lacked clarity and posed execution risks, while Netflix's offer is well-financed and involves fewer regulatory hurdles.

Netflix welcomed Warner Bros’ recommendation, asserting that Paramount had misled shareholders regarding the guarantee of its $30-per-share cash offer.

The biggest difference between Netflix and Paramount bids is that of structure: Netflix aims to acquire Warner Bros’ movie studio and HBO, while Paramount seeks a complete takeover, including television networks.

Experts warn that a full acquisition by Paramount could face scrutiny in the U.S. and Europe due to monopoly concerns. Despite the board’s recommendation, the possibility of a revised offer from Paramount would result in prolonging the Warner Bros. sell-off process.