By The revised tender offer for Warner Bros. Discovery that was filed just before Christmas by David Ellison’s Paramount Skydance has been rejected.
The WBD board released a letter this morning rejecting the new offer and sticking with its signed agreement with Netflix.
The all-cash offer, priced at $30 per share, reportedly included Larry Ellison personally promising a full backstop on the deal, along with an increase of the termination fee to $5.8 billion to match Netflix.
In the letter, the board says the changes were not enough:
“Your Board unanimously determined that the PSKY amended offer remains inadequate particularly given the insufficient value it would provide, the lack of certainty in PSKY’s ability to complete the offer, and the risks and costs borne by WBD shareholders should PSKY fail to complete the offer.”
WBD calls the revised offer “the largest LBO [leveraged buyout] in history” and a much riskier bet as financing arrangements could easily be jeopardised.
They say the “aggressive transaction structure poses materially more risk for WBD and its shareholders when compared to the [conventional structure of the] Netflix merger.”
Source: THR
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