David Ellison says he knows why the Warner Bros. Discovery board can't accept his most recent offer

"Paramount CEO David Ellison says he knows the Warner Bros. Discovery board can't accept his latest offer of $30 per share for the company. Why? "If they accept the offer exactly as it is today, right, then they're admitting breach of fiduciary duty, so I don't think they can just take that," Ellison was overheard saying at the UBS media event on Tuesday, Business Insider has exclusively learned."

"On Friday, WBD announced it had accepted Netflix's offer of $27.75 per share for WBD's studio and streaming assets. Then on Monday, Paramount launched a hostile bid for the entire company, including its TV networks like CNN and TNT. Ellison said Paramount's Monday offer was the same as the one it delivered privately to WBD on Thursday. "We wanted to communicate to everyone: We didn't change the offer. This is exactly what we sent them," Ellison said at the UBS event."

"That's why Ellison says it would be fraught for WBD's board, which is duty-bound to act in the best interests of shareholders, to accept it. How can they accept the offer they already indicated wasn't good enough? WBD issued a statement in response to Paramount's hostile bid, saying that its board would "carefully review and consider Paramount Skydance's offer" in a way that's "consistent with its fiduciary duties and in consultation with its independent financial and legal advisors.""

Paramount launched a hostile $30-per-share bid for Warner Bros. Discovery after WBD accepted Netflix's $27.75-per-share offer for its studio and streaming assets. Paramount's offer covers the entire company, including TV networks such as CNN and TNT. David Ellison stated that the WBD board could not accept the unchanged offer without admitting a breach of fiduciary duty, noting the public hostile bid matched a prior private proposal. WBD said its board would carefully review the Paramount Skydance offer with independent financial and legal advisors. Ellison indicated Paramount may raise the bid or seek shareholder approval.

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