WBD Board: 'Paramount Offer Is an Illusion — Shareholders, Don't Accept'

Warner Bros. Discovery (WBD) board unanimously opposed Paramount Skydance''s (PSKY) $30 per share all-cash tender offer — formally recommending shareholders not tender their shares, characterizing the offer as appearing more attractive ("higher number") but being an "illusion" in terms of transaction certainty and shareholder value. WBD filed SEC document 14D-9 alongside a shareholder letter (December 17 US Eastern time), stating PSKY''s tender offer fails to meet "Superior Proposal" criteria. Key objection: financing commitment structure. PSKY highlighted Ellison family financial backing — WBD argued this structure is based on a revocable trust, with undisclosed asset/liability composition and liability cap limits, making actual transaction completion uncertain and transferring risk to shareholders. By contrast, Netflix merger: binding contracts with enforceable commitments already in place. Tender offer structural critique: tender offers (unlike merger agreements) are relatively non-binding structures with higher potential for condition changes, extensions, and withdrawal — creating asymmetric risk for shareholders if the deal falls through. Hidden costs: accepting PSKY''s offer would require WBD to terminate the Netflix merger agreement, incurring significant termination fees and advisory costs — directly reducing shareholder value. Netflix''s structure: accepted a large termination fee in cash to manage regulatory risk, enhancing deal stability. Board''s core thesis: the question is not which offer has a higher per-share price but which offer will actually close — "deal certainty" (the probability-weighted expected value) favors the Netflix merger over a higher-priced but uncertain tender offer from a structure with revocable funding commitments.