Warner rejects Paramount offer and recommends partners to reject it

Warner Bros Discovery has officially recommended its shareholders to reject Paramount's latest offer, calling instead for support of its existing deal with Netflix. The decision was made official in a statement. The ball is now in the court of Paramount and its CEO, David Ellison, who will decide whether to improve his (hostile) offer.

Warner shares were trading near $30, suggesting that investors expect Paramount to increase its offer. Netflix had agreed to pay $27.75 per share in cash and stock for Warner Studios and the Hbo Max streaming service, while Paramount had offered $30 in cash per share for the entire company. Paramount's tender offer is set to expire on 8 January, so the company may wait until then to decide whether to make an improved offer public.

Meanwhile Affinity Partners, the fund linked to President Trump's son-in-law Jared Kushner, has withdrawn from Paramount's bid for Warner Bros Discovery. Axios reports. The news comes ahead of the expected announcement by the Warner Bros board of directors, which then rejected Paramount's latest offer of $30 per share, all cash, recommending Netflix's on the other side.

One of the main concerns of the Warner Bros. board regarding Paramount's initial offer was the possibility that the deal might fall through if one of the seven financing partners (besides RedBird Capital) withdrew at the last minute.

"With two strong competitors vying to secure the future of this unique US asset, Affinity has decided to no longer pursue this opportunity," said an Affinity spokesperson. "The investment dynamics have changed significantly since we initially became involved in October. We continue to believe there is a sound strategic rationale behind Paramount's offering."