LONDON (ShareCast) - (Sharecast News) - Warner Bros Discovery on Wednesday rebuffed a hostile $108bn bid from rival Paramount, calling it inadequate and questioning the company's ability to finance the deal, while in a separate twist a key backer of the offer pulled out.
Paramount went directly to shareholders last week with its all-cash, $30-per-share takeover offer, after losing out to Netflix's $83bn proposal in an auction for the studio and streaming company.

In a letter to shareholders WBD accused Paramount of having "consistently misled" investors by claiming its bid has a "full backstop" - a safety net to ensure it has sufficient funds - from the billionaire Ellison family.

"Following a careful evaluation of Paramount's recently launched tender offer, the Board concluded that the offer's value is inadequate, with significant risks and costs imposed on our shareholders," Samuel A Di Piazza Jr, chairman of WBD's board, said in a statement.

"This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of their six previous proposals."

"We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination."

Meanwhile, investment firm Affinity Partners - founded by Jared Kushner, son-in-law of US President Donald Trump - which had been backing the Paramount offer, pulled out.

"With two strong competitors vying to secure the future of this unique American asset, Affinity has decided no longer to pursue the opportunity," Affinity said.

"The dynamics of the investment have changed significantly since we initially became involved in October. We continue to believe there is a strong strategic rationale for Paramount's offer."

Netflix's offer is worth $23.25 in cash and $4.50 in stock per share. It does not include the remaining television assets, including CNN, which WBD has been valuing between $3 and $5 a share.

David Ellison, Paramount's chief executive and son of Oracle chief Larry Ellison, has also said the Netflix bid was likely to face more regulatory scrutiny than the Paramount approach, meaning there is greater risk the deal will not close.

A regulatory filing revealed the Paramount bid was backed by outside funders including Affinity, Saudi Arabia's Public Investment Fund; and the Qatar Investment Authority.

A person close to Paramount also told the Financial Times newspaper Kushner's exit from the offer was meant to smooth over the bid's path with WBD's board and strip out the "noise" about his ties to Trump, who has threatened to get involved in scrutiny of the bid.

Reporting by Frank Prenesti for Sharecast.com

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