The board of directors at Warner Bros. Discovery are urging shareholders to decline Paramount Skydance's takeover offer of $108 million, while reaffirming support for the agreement with Netflix announced Dec. 5. Citing concerns over financing, risks and additional costs, the board sent a letter to shareholders on Wednesday, saying, "PSKY's tender offer remains inferior to the Netflix merger."

WBD's board stated that its review process for Paramount's latest bid included its members, as well as independent assessments from financial and legal advisers, and input from top management. The letter said that it believes there is no difference in regulatory risks between the Netflix agreement and Paramount's proposal. 

The board noted that the Paramount bid has no financial backing from billionaire Larry Ellison or his family whatsoever. Ellison is the father of David Ellison, the CEO of Paramount

"This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of their six previous proposals," board Chairman Samuel A. Di Piazza Jr. said in a statement. "We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination."

Netflix addresses Paramount bid

Netflix co-CEOs Ted Sarandos and Greg Peters also sent a letter to WBD's shareholders on Wednesday, accepting its board's commitment to uphold their agreement and outlining why the streaming giant's merger is the best plan. Pointing to financial credibility, less risk and the likelihood of regulatory approval, the company called its agreement "superior." 

In his statement, Sarandos provided reassurance that the merger will prioritize prestige TV and Warner Bros. film releases in movie theaters. 

"This was a competitive process that delivered the best outcome for consumers, creators, stockholders and the broader entertainment industry," Sarandos said in a statement.

Paramount's $108 million takeover proposal

Netflix announced its intention to acquire Warner Bros., HBO and its streaming business HBO Max, in an $82.7 billion deal. That deal has been contested by Paramount, which announced Dec. 8 that it was launching a hostile bid to acquire Warner Bros. Discovery.

Netflix's deal would see the streaming giant acquire the movie studio, HBO and the streaming arm of Warner Bros. Discovery, following the latter company's earlier announcement this year that it's splitting in two. WBD is expected to spin off its Discovery business in the third quarter of 2026.

Paramount's takeover attempt offered Warner Bros. investors $30 a share (as opposed to Netflix's $27.5 a share, which includes $23.25 in cash and $4.50 in shares of Netflix common stock), totaling $108 billion. Unlike Netflix's agreement, Paramount's bid would see it purchase the entirety of Warner Bros. Discovery in an all-cash transaction. 

In its statement to investors, Paramount said its private offer (one of six) to WBD was being taken "directly to WBD shareholders and its board of directors to ensure they have the opportunity to pursue this clearly superior alternative."

Netflix's offer to acquire Warner Bros.

By acquiring Warner Bros., HBO and HBO Max, Netflix would not only boost its own catalog of shows and films -- which already includes big hitters such as Stranger Things, Wednesday and Squid Game, with Warner Bros. properties Harry Potter, Friends and Batman -- but will also see it play host to HBO shows, including Game of Thrones and Succession. 

"Our mission has always been to entertain the world," Sarandos said in a statement. He promised the deal would bring audiences "more of what they love and help define the next century of storytelling."

Peters praised WBD's longevity and executive team and added, "With our global reach and proven business model, we can introduce a broader audience to the worlds they create -- giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders."

The big question for most Netflix subscribers will likely be how the acquisition might affect monthly subscription costs. Netflix is our top pick of the many streaming services you have available to you, but one of the few downsides we note in our review is that the premium plans are already on the pricey end of the spectrum.

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It's too early to say what the knock-on impact on pricing might look like, but streaming services are getting increasingly expensive, and this acquisition is unlikely to reverse that trend. While it's unclear whether Netflix plans to merge both streaming apps into a single offering, the company said that the agreement will enable it to "optimize its plans for consumers, enhancing viewing options and expanding access to content." 

The deal, which values Warner Bros. Discovery at about $72 billion after debt, was unanimously approved by the boards of both companies. It's expected to allow Netflix to grow its production capacity for original titles and invest in more original content. Netflix said that it expects to maintain Warner Bros.' current operations, and still expects theatrical releases for films (like The Batman Part 2) to be business as usual. 

What's next if the transaction clears regulatory hurdles? "If this deal makes it through regulatory approval, Netflix will cement itself as the Goliath of streaming services now with the combined weight of HBO Max and the content studios behind it all," said Forrester VP Research Director Mike Proulx. "This deal changes the calculus of the streaming wars, representing a seismic shift in the entertainment industry."

After Netflix's first announcement, President Donald Trump expressed concern about the Netflix-Warner Bros merger, stating, "It is a big market share. It could be a problem." Trump confirmed that Sarandos had recently met with him to lobby for the acquisition.