Paramount (NASDAQ:PSKY) reaffirmed its $30-per-share cash offer for Warner Bros. Discovery on Thursday, resisting pressure to sweeten the deal even after WBD’s board dismissed the proposal as a risky "leveraged buyout."
The standoff has become a high-stakes valuation war.
Paramount CEO David Ellison argued Thursday that his $108 billion all-cash offer is "unmistakably superior" to WBD’s existing agreement to sell its studio and streaming assets to Netflix.
Paramount’s analysis now values the Netflix deal at $27.42 per share—a figure that has slid as Netflix’s stock price has dipped below the "collar" range intended to protect the deal’s value.
"Our offer clearly provides WBD investors greater value and a more certain, expedited path to completion," Ellison said in a statement.
Paramount is urging WBD shareholders to bypass their board and tender their shares directly to the suitor by the January 21 deadline.
A central flashpoint in the dispute is the fate of WBD’s legacy cable networks, including CNN and TNT.
Under the Netflix plan, these assets would be spun off into a new entity called Discovery Global.
While WBD’s board claims this "linear stub" holds significant future value, Paramount has assigned it a value of $0.00.
To support this bleak outlook, Paramount pointed to the disastrous market debut of Versant—Comcast’s recent spin-off of its own cable channels, including MS NOW and CNBC—which saw its shares plunge 30% this week.
WBD’s board, led by Chair Samuel A. Di Piazza Jr., remains unmoved.
On Wednesday, the board warned that a Paramount takeover would require nearly $95 billion in debt and equity financing—roughly seven times Paramount’s own market capitalization—creating an "extraordinary" risk of the deal collapsing.
They also cited a $4.7 billion price tag in break-up fees and debt costs if WBD were to abandon Netflix for Paramount.
With the Oracle co-founder Larry Ellison providing a $40.4 billion personal guarantee to backstop the Paramount bid, the financial muscle is there, but the board’s resistance remains the primary hurdle.
Investors are now watching closely to see if the January 21 tender deadline forces a shift in strategy or a higher bid from the Ellison camp.