Warner Bros. Discovery’s board unanimously said Paramount’s proposal does not offer enough value and comes with major risks|@warnerbros|X

Warner Bros. Discovery has asked shareholders to reject Paramount’s revised takeover bid, saying its existing agreement with Netflix remains far stronger and safer. 

In a letter released Wednesday, Warner said Paramount’s amended $77.9 billion all-cash offer still falls short of Netflix’s $72 billion deal for its movie and TV studios and HBO Max.

Warner’s board unanimously said Paramount’s proposal does not offer sufficient value and carries major risks. It warned that dropping the Netflix deal would cost the company billions of dollars, including a $2.8 billion breakup fee.

The board also raised concerns about Paramount’s ability to close the deal, given its reliance on debt financing.

Warner said the Netflix deal provides shareholders with greater certainty and potential upside, as they would retain shares in the remaining business.

Warner shares have traded above the Netflix deal price, signaling expectations that Paramount may raise its bid before the January 21 deadline.