Warner Bros Discovery board rejects hostile bid from Paramount

Dec 17 (Reuters) - Warner Bros Discovery's committee rejected Paramount Skydance's $108.4 cardinal hostile bid connected Wednesday, saying it failed to supply capable financing assurances.

In a missive to shareholders, disclosed successful a regulatory filing, the committee wrote that Paramount had "consistently ​misled" Warner Bros shareholders that its $30-per-share currency connection was afloat guaranteed, oregon "backstopped," by the Ellison family, led by billionaire ‌and Oracle co-founder Larry Ellison.

"It does not, and ne'er has," the committee wrote of the warrant of Paramount's offer, noting that the connection posed "numerous, important risks.

Here's what analysts ‌and marketplace experts are saying astir the latest development:

JEFFREY WLODARCZAK, CEO, PIVOTAL RESEARCH GROUP, NASHVILLE

"I deliberation the WBD concerns implicit the PSKY connection are morganatic fixed NFLX connection is steadfast and backed by NFLX, a monolithic institution with important quality to adhd leverage. It appears the PSKY connection is not backed by Ellison household straight and tin beryllium withdrawn. On the different hand, the PSKY connection is apt to sail past ⁠regulators portion NFLX connection is going to beryllium ‌heavily scrutinized. But NFLX tin wide hurdles by modifying the woody specified arsenic agreeing to merchantability HBO with immoderate short/medium-term contented deals successful spot to idiosyncratic similar Comcast."

"To get the woody done, PSKY is apt ‍going to person to get escaped of the revocable spot (Ellison household backstop), halt the hostile offer, set for NFLX break-up interest (higher offer) and a higher break-up fee. The occupation for Ellison is that determination is skepticism successful the marketplace from investors successful Oracle's information halfway strategy and that entity is ​already precise highly leveraged."

PAOLO PESCATORE, ANALYST, PP FORESIGHT, LONDON

"This is simply a beardown endorsement of Netflix's connection and its aboriginal quality to ‌execute arsenic a combined entity."

"Furthermore, and much significantly, a amended woody each circular successful presumption of worth and regulatory approval. It does consciousness similar the way of slightest resistance."

"This present leaves Paramount successful a precarious position, successful the shadows and a weaker subordinate compared to its stronger rivals."

"The shot is present firmly successful Paramount Skydance's tribunal to importantly rise its offer. While this mightiness inactive happen, it's unclear whether the result volition alteration fixed the concerns."

JONATHAN KEES, SENIOR RESEARCH ANALYST, DAIWA CAPITAL MARKETS, NEW YORK

"It apt volition go a media and ⁠proxy spectacle with each broadside presenting their lawsuit to shareholders, arsenic good ​as to the press. I expect a batch of arguments and adjacent accusations by ​each broadside to sway the nationalist and shareholders. The combat should culminate astatine the adjacent WBD shareholder meeting, which should beryllium held aboriginal summertime of 2026."