Paramount Skydance’s latest bid to acquire Warner Bros Discovery still falls short, according to a major shareholder, highlighting continued resistance to the deal despite improved financing terms.
Harris Oakmark, Warner Bros’ fifth-largest shareholder with about 96 million shares, or roughly 4% of the company, said on Monday that the revised proposal from Paramount Skydance is not compelling enough. Alex Fitch, portfolio manager at Harris Oakmark and Director of U.S. Research, said the changes were “necessary, but not sufficient,” adding that if Paramount wants to prevail, it will need to offer shareholders stronger incentives.
Paramount earlier this week amended its $108.4 billion hostile bid, seeking to reassure investors about financing. Larry Ellison, co-founder of Oracle, whose son David controls Paramount, is now personally guaranteeing $40.4 billion of the offer. The move was intended to ease concerns over funding, much of which had been held in a revocable trust.
Paramount also raised the breakup fee it would pay to $5.8 billion from $5 billion if regulators block the deal, matching a competing offer from Netflix. However, Paramount did not increase its headline bid price of $30 per share.
Warner Bros shareholders now have until January 21 to decide whether to accept the tender offer, an extension from the earlier January 8 deadline. The Warner Bros board has unanimously recommended rejecting Paramount’s prior bid in favor of Netflix’s proposal, citing more secure financing. Although Netflix’s cash offer of $23.25 per share is lower, the board said it provides greater certainty and includes Netflix shares plus potential value from spinning off Discovery Global.
Some investors see Paramount’s revised offer as more credible. Thomas Poehling, a Warner Bros and Paramount shareholder, said the Ellison guarantee “adds a lot of stability” and reduces financing risk, making the bid more attractive if Netflix does not respond with an improved offer.
The contest underscores the perceived value of Warner Bros’ portfolio, which includes HBO Max and major franchises such as Harry Potter, Lord of the Rings and Superman. Large institutional investors including Vanguard, State Street and BlackRock collectively hold more than 22% of Warner Bros and also rank among the top shareholders in Paramount and Netflix, though none commented on the latest developments.
