Once again, Warner Bros. Discovery has chosen Netflix as its preferred suitor over Paramount.
On Wednesday, the WBD board advised shareholders that last month’s revised offer from Paramount is still not as appealing as the existing agreement with Netflix — even though Paramount said it had addressed many of Warner Bros.’ biggest concerns.
The WBD board called Paramount’s hostile takeover offer “inadequate” and overly risky.
In a letter to shareholders, the board likened Paramount’s proposal to a leveraged buyout, a financial process that relies on using mostly borrowed funds to buy a company.
Paramount is much smaller than WBD, so “to effect the transaction, it intends to incur an extraordinary amount of incremental debt — more than $50 billion — through arrangements with multiple financing partners,” the WBD letter stated.
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