Warner Bros. shareholders were 'consistently misled' by Paramount, board says in rejection letter: There's no Ellison family backstop, and never was | Fortune

"Warner Bros. Discovery's board unanimously rejected Paramount Skydance's all-cash bid for the company, valued at roughly $108 billion, while accusing its suitor of "consistently" misleading WBD shareholders about the financing behind its takeover bid, calling it inferior to the company's planned merger with Netflix. In a detailed letter released Wednesday, the WBD board said it had concluded that the tender offer launched by Paramount Skydance (PSKY) on December 8 is "not in the best interests" of WBD shareholders and does not qualify as a "Superior Proposal" under the company's existing merger agreement with Netflix. The board reiterated its recommendation that shareholders back the Netflix transaction and not tender their shares into the PSKY offer."

"The WBD letter took pains to argue to shareholders that the board had conducted the process carefully, with the subtext of the Revlon precedent, as Fortune previously reported-a pivotal plank of corporate law for heated takeover battles exactly like this one. In particular, the WBD letter stressed two arguments to shareholders for why it considered the Netflix offer superior: the "illusory" nature of Paramount's offer and the questionable "backstop" from the Ellison family, which controls Skydance Media. Paramount CEO David Ellison's father is Oracle founder Larry Ellison, the second-richest man in the world, a longtime Republican donor and a reported friend to President Trump. (The night before, the president implicitly questioned even this: "If they are friends, I'd hate to see my enemi"

Warner Bros. Discovery's board unanimously rejected Paramount Skydance's roughly $108 billion all-cash bid, accusing the suitor of consistently misleading shareholders about bid financing and deeming the offer inferior to the planned Netflix merger. The board concluded Paramount Skydance's December 8 tender offer is not in shareholders' best interests and does not qualify as a Superior Proposal under the existing Netflix merger agreement, and it recommended shareholders back the Netflix transaction rather than tendering into the PSKY offer. Netflix welcomed the board's recommendation. The board emphasized the illusory nature of Paramount's offer and questioned the Ellison family's backstop support.

Read at Fortune