Warner Bros. Discovery (NASDAQ:WBD) announced that its Board of Directors has unanimously recommended that shareholders reject the amended tender offer from Paramount Skydance (PSKY) and continue to support the pending merger with Netflix (NASDAQ: NFLX).
The board emphasized that the Netflix transaction provides superior value, offering $23.25 in cash plus $4.50 in target Netflix stock value per share.
It highlighted greater certainty of closing and the absence of comparable transaction costs for shareholders.
In contrast, the Board stated that accepting the Paramount-Skydance offer would impose approximately $4.7 billion in costs on Warner Bros. Discovery, including a $2.8 billion termination fee payable to Netflix, a $1.5 billion fee, and roughly $350 million in interest expenses.
The competing proposal would also require more than $50 billion in incremental debt, resulting in approximately 7x pro forma leverage, and could take 12 to 18 months to complete.