Warner Bros. rejects Paramount’s hostile bid, backs Netflix deal amid takeover battle

Dubai: Warner Bros. Discovery (WBD) has rejected a hostile takeover bid from Paramount Skydance, siding instead with a previously agreed deal with streaming giant Netflix and escalating one of the most closely watched media consolidation battles in years.

In a statement issued on Wednesday, Warner Bros. said its board of directors had unanimously determined that Paramount Skydance’s tender offer “is not in the best interests of WBD and its shareholders” and does not qualify as a “Superior Proposal” under the merger agreement signed with Netflix on December 5. The board urged shareholders to reject the Paramount bid, citing greater certainty and long-term value in the Netflix transaction.

Paramount Skydance went public with its hostile offer last week after failing to persuade Warner’s leadership to abandon the Netflix deal through private negotiations. The competing bids place Warner Bros. — owner of HBO, Warner Bros. Studios, CNN and Discovery — at the centre of a takeover fight with far-reaching implications for film production, streaming markets and US news media.

Competing bids

Paramount is offering $30 per Warner share, topping Netflix’s agreed price of $27.75 per share. Despite the higher headline valuation, Warner’s board said the Paramount proposal carries greater execution and regulatory risk and does not meet the contractual threshold required to replace the Netflix deal.

While the board has formally rejected Paramount’s bid, shareholders retain the right to tender their shares to Paramount. Unlike Netflix’s proposal, which excludes Warner’s cable operations, Paramount’s offer includes the company’s cable networks and news business.

A Paramount-led acquisition would bring CBS and CNN under the same ownership, a structure that could intensify regulatory and political scrutiny in Washington and among media watchdogs.

Regulatory scrutiny

Netflix’s deal is structured to close only after Warner completes its previously announced separation of its cable operations, leaving Netflix focused on Warner’s studios and streaming assets, including HBO Max.

Critics argue that combining HBO Max with Netflix would concentrate market power in streaming, while Netflix has countered that the deal would expand investment in content and strengthen competition across the entertainment industry.

Both transactions face extensive regulatory review, given the scale of the assets involved and their influence on film distribution, streaming competition and newsroom independence.

Political pressure

Politics has further complicated the process. US President Donald Trump has signalled that regulatory approval will not be straightforward and has criticised Netflix’s proposal over potential market dominance.

Trump has also repeatedly attacked CBS over editorial decisions at “60 Minutes” and has maintained close ties to Oracle founder Larry Ellison, whose family trust is backing Paramount Skydance and whose son serves as Paramount’s chief executive.

The combination of political scrutiny and regulatory oversight has raised uncertainty around timelines and approval conditions for both bids.

Gulf capital enters

Beyond the US political debate, the Paramount bid has drawn significant international financing, including capital from the Gulf. A group of Middle Eastern investors has committed $24 billion to help bankroll Paramount Skydance’s offer.

The backers include Saudi Arabia’s Public Investment Fund, the Qatar Investment Authority and Abu Dhabi-based L’imad Holding Co., highlighting the region’s growing role in funding global mega-deals.

Their participation reflects deeper ties between GCC sovereign investors and global private equity firms active in the transaction.

Deep financial ties

Those connections extend to firms such as Apollo Global Management, which is providing a substantial portion of the financing for the Paramount offer and has longstanding links with Abu Dhabi’s Mubadala Investment Company.

The Saudi wealth fund, alongside the QIA and Abu Dhabi’s Lunate, has also invested billions into Affinity Partners, the firm founded by Trump’s son-in-law Jared Kushner, although Affinity has since withdrawn from the Paramount bid.

These relationships underscore how Gulf capital has become embedded across the global private equity ecosystem.

Soft power shift

For Gulf investors, the transaction highlights a broader shift in capital deployment. Sovereign wealth funds controlled by Saudi Arabia, Abu Dhabi and Qatar invested $82 billion globally last year, accounting for more than 60 per cent of all sovereign wealth fund activity, according to Global SWF.

If the Paramount bid were to succeed, Middle Eastern investors would gain exposure to influential media assets, including Warner Bros.’ film and television studios, HBO’s global streaming platform and major US cable networks.

For now, Warner Bros.’ rejection of the hostile bid keeps the Netflix deal on track, setting the stage for continued regulatory scrutiny and shareholder debate as the battle for control of one of Hollywood’s most powerful media groups continues.

- With inputs from Agencies