Warner Bros. Discovery Charts Independent Path, Spurns Paramount for Netflix Alliance

As the year draws to a close, Warner Bros. Discovery is poised to make a pivotal strategic choice. According to multiple consistent reports, the media conglomerate is set to formally reject an enhanced acquisition proposal from Paramount Skydance. This decision comes despite an offer valuing Paramount at $108.4 billion, or $30 per share. Instead, the company's board is leaning toward a structurally distinct transaction with Netflix, which carries a lower valuation but is seen as a more favorable alternative.

Paramount Skydance had recently improved its terms in an effort to secure a deal. Oracle co-founder Larry Ellison personally guaranteed $40.4 billion in equity to alleviate financing concerns. The bidder also offered a higher break-up fee should regulatory obstacles arise and extended the proposal's deadline.

However, skepticism persists within the Warner Bros. Discovery boardroom. Core concerns revolve around long-term value creation and debt management strategies. Internally, a full merger with Paramount is apparently viewed as a less strategically coherent fit compared to other restructuring avenues available to the company.

The Netflix Alternative: A Different Structural Blueprint

The currently favored option involves the sale of Warner Bros. Discovery's premium assets to Netflix. This portfolio includes Warner Bros. Pictures, HBO, and the Max streaming service. Valued at approximately $82.7 billion, the transaction would price the affected division at $27.75 per share, with payment made through a combination of cash and Netflix stock.

A key feature of this plan is the simultaneous spin-off of Warner Bros. Discovery's linear television businesses into a separate, standalone entity to be named "Discovery Global." The board perceives this structure as offering superior risk-adjusted returns and a higher probability of securing regulatory approvals, even with the lower total valuation. For shareholders, an added benefit is the opportunity to participate in the future growth of the streaming giant through the retained Netflix equity stake.

Should investors sell immediately? Or is it worth buying Warner Bros. Discovery (A)?

Operational Stability Secured via Canal+ Partnership

Amid the high-stakes merger discussions, Warner Bros. Discovery has moved to ensure operational continuity. The company yesterday finalized a multi-year agreement with the French Canal+ Group. This pact will bring the HBO Max streaming service to Belgium and Austria starting in early 2026 and extends the distribution of twelve linear channels via MultiChoice platforms across Africa.

Furthermore, Warner films will become available on Canal+ just six months after their theatrical release—a stabilizing factor for the studio division that remains effective regardless of future ownership changes.

Formal Rejection Anticipated in Coming Days

The market now awaits a board meeting scheduled for next week, where the official rejection of the Paramount offer is expected to be ratified. The rationale will subsequently be detailed in a formal SEC filing (Schedule 14D-9).

Attention will swiftly turn to Paramount's response. Will the bidder increase its offer beyond $30 per share, or might it pursue legal action alleging breaches of fiduciary duty by the Warner Bros. Discovery board? Concurrently, focus will intensify on finalizing the terms of the Netflix deal and monitoring initial feedback from antitrust authorities regarding both potential transactions.