Paramount rips apart Warner’s sordid ‘process’ as it reveals 2 years of stalking and escalating bids before turning hostile | Luck

The filing revealed the last text message from Paramount CEO to WBD counterpart David Zaslav at around 4pm ET on December 4th, the day before Netflix finally announced its deal, as previously reported by the site. Financial Times. “Daivd (sic) I appreciate you being underwater today so I wanted to send you a quick text. Please note that the next time you meet as a board, we wanted to offer you a package that would address all of the issues that you (sic) have discussed, we (sic) I,” David Ellison wrote as he clearly felt his goal slipping away.

“Also, please know that despite the noise of the last 24 hours, I have nothing but respect and admiration for you and the company,” Ellison added. “It would be the honor of a lifetime to be your partner and owner of these iconic assets. If we have the honor of working together, you will see that my father and I are the people you had dinner with. We are always loyal and honest to our partners and we hope to have the opportunity to prove it to you. All the best, David.” Later that day, Paramount felt that Zaslav had criticized the “tainted” dirty process.

Paramount told investors today that it continues to believe it was never taken seriously. “During the entire sordid ‘process’ conducted by the Warner Bros. board, Warner Bros. representatives did not provide a single designation of a single transaction document, hold a single meeting where they went through the documents page by page, or engage in ‘real time’ back and forth negotiations with Paramount or its advisors.”

Early release in 2023

In 2023 and 2024, Paramount’s predecessor, Paramount Global, and Warner Bros. they held occasional talks about a possible merger, but those talks ended without an agreement as Paramount Global chose instead to merge with Skydance, under the control of current CEO Ellison. After this transaction closed in August 2025, new Paramount management reconsidered the idea of ​​a merger with Warner Bros. and concluded that the merger could create a stronger and scaled competitor for streaming platforms and big tech companies, according to the SEC.​

The urgency increased in June 2025 when Warner Bros. publicly unveiled plans to split in two with the goal of completion by mid-2026, a strategy it defended until early fall. Believing that this breakup would destroy value and make any future acquisition of the entire company difficult, Paramount decided to act quickly, seeing a narrow window to buy out all of Warner Bros.

Paramount’s escalating designs

In early September 2025, the filing said, there were media reports that Paramount was preparing an offer to help push Warner Bros. the stock price surged from an anticipated closing price of $12.54 to trade at $19.46 on September 15, a day after Paramount offered $19 a share in cash and stock.The New York Times reported Paramount’s secret bids in October.)

Warner Bros. it did so within days, saying the offer undervalued the company and that its own breakup plan promised better long-term rejection value. Paramount responded on Sept. 30 with an improved offer of $22 per share, mostly in cash, and went further in protecting the deal, including a $2 billion termination fee and a commitment to litigate to secure an antitrust review, while changing roles for Zaslav as CEO and co-chairman of the combined company.

Warner Bros. she rejected this proposal as well, again calling it inadequate and insisting that its planned department remained superior, a stance that only reinforced Paramount’s view that the board was underestimating the industrial logic of the combination. In October, Warner Bros. publicly announced a broader review of “strategic alternatives”, indicating that a formal sale process would be underway and that multiple parties were interested in both the company as a whole and specific assets such as its streaming arm.​​

Paramount attempted to enter the process on more favorable terms, reneging on Warner Bros.’s original nondisclosure agreement, which included a lengthy suspension, strict controls on financial contacts, and a waiver of potential legal claims to the sale. Her advisers negotiated a shorter break, a “most favored nation clause” over other bidders, and the freedom to challenge the process if Warner Bros. they eventually back away from their separation plan, underscoring their deep distrust of how the auction could proceed.​

Due diligence and funding start-up

As the process unfolded, Paramount was given limited access to a virtual data room that it considered “sparsely populated” given the size and complexity of the potential transaction. In mid-November, Warner Bros. in California for a one-on-one presentation by management, while antitrust lawyers from both sides met to assess regulatory risks and make arguments that the Paramount-Warner Bros. merger. would be pro-competitive in a market dominated by tech-enabled streaming giants.

In parallel with these talks, Paramount’s board established a special committee of independent directors to review a large equity infusion from the Ellison family and private equity firm RedBird. Paramount also blocked a major $54 billion secured bridge led by Wall Street banks.

Bidding war with Netflix

On November 20, Paramount submitted another improved proposal, raising its implied offer to $25.50 per share, heavily weighted by cash and backed by underwritten debt obligations and pledged equity. The offer included a $5 billion regulatory fee and more aggressive litigation, signaling Paramount’s willingness to fight regulators if the deal has to close. (In its winning bid, Netflix committed to a breakup fee of $5.8 billion, one of the highest ever, according to Bloomberg.)

Although Paramount sweetened its terms, public comments suggested that some influential figures at Warner Bros. they saw Netflix as a more attractive partner, especially for its focus on pure-play streaming and global reach. During a specific Nov. 13 interview on CNBC, WBD chairman emeritus John Malone questioned Paramount’s intervention and discussed the merits of the Netflix deal, adding to market speculation that Warner Bros. may have preferred the first streaming tie-up over the merger of older studios.

The deal with Netflix and Paramount’s pivot to tender

This process culminated on December 4, 2025, when Warner Bros. has signed a merger agreement with Netflix that will see Netflix acquire Warner Bros. streaming businesses after a complex internal reorganization and spin-off of additional assets. The deal offered cash and Netflix stock with a total value of about $27.75 per share, but included adjustments related to net debt and a 21-month external lockup.​​

Paramount responded the same day with what it calls a “preliminary proposal,” a merger agreement that values ​​Warner Bros. to $30 per share in outright cash, arguing for stronger regulatory obligations, a shorter term and no price cuts tied to balance sheet mechanisms. When Warner Bros. still decided to go ahead with the Netflix deal, Paramount concluded that the board had decided on “a clearly financially inferior transaction with extraordinary regulatory risk and a longer timeline for possible closing” and decided that the only way forward was to go directly to shareholders.​​

Calls to Paramount, WBD and Netflix for comment on the events as outlined in the filing were not immediately returned. We will update this post with any response.

Editor’s Note: The author worked for Netflix from June 2024 to July 2025.

for this story Luck journalists used generative AI as a research tool. The editor verified the correctness of the information before publication.