• Warner Bros. Discovery has rejected Paramount Skydance's $108 billion takeover bid.
• The board favors a previous $72 billion deal with Netflix, citing better shareholder value.
• Paramount's bid is seen as risky and poorly backed financially.
• US President Trump weighed in on the competing offers, raising regulatory concerns.
• A letter to shareholders from Warner Bros. criticized Paramount for misleading claims about its financing.

Warner Bros. Discovery (WBD) announced on Wednesday that it is urging shareholders to reject Paramount Skydance's hostile takeover bid of $108.4 billion, favoring a merger with Netflix instead, which is valued at approximately $72 billion. The WBD board emphasizes that the Netflix deal, which includes part cash and stock, offers superior, more certain value for shareholders and is grounded in a solid financial agreement, as it does not require additional equity financing, unlike Paramount’s proposal, which has raised concerns about its viability and backing, according to CBS News, BBC, and India Times.

Paramount launched its bid just three days after WBD agreed to terms with Netflix, positioning it as a direct challenge to the streaming giant's acquisition strategy. However, Warner Bros expressed dissatisfaction with Paramount’s offer, which they labeled as “misleading” and claimed it fails to address long-standing concerns regarding its financing, particularly that it lacks a firm commitment from the Ellison family, according to South China Morning Post and Le Monde.

In a detailed letter to its shareholders, the WBD board outlined how Paramount’s proposed financing structure relies heavily on an “unknown and opaque revocable trust” that does not provide a reliable backstop for the offer. WBD further indicated that the offer is fraught with risks, especially given that it involves a high equity commitment from investors without substantial backing, which could disadvantage shareholders, as noted by India Times and Al Jazeera.

Both bids are under scrutiny due to potential regulatory challenges, particularly with the involvement of US President Donald Trump, who has expressed concerns about the dominance Netflix could achieve in the market with its acquisition of Warner Bros' assets. He has indicated that the ongoing media scrutiny might affect regulatory outcomes, adding another layer of complexity to this competitive landscape, according to The Hill and India Times.

Amidst these developments, Warner Bros Discovery's clear direction towards a merger with Netflix indicates a significant shift in the entertainment industry. The combination of these media giants promises a more prominent and competitive streaming platform, a viewpoint reiterated by both Netflix and Warner Bros, who view this merger as a critical step towards maximizing shareholder value, as conveyed by CBS News and South China Morning Post.