Warner Bros said Paramount amended its offer shortly after, but in a letter to shareholders, external on Wednesday the Warner Bros board said the offer was “not superior, or even comparable, to the Netflix merger”.
It said Paramount had “repeatedly failed to submit the best proposal” for shareholders, despite being given clear directions for potential solutions to deficiencies in the offer.
Among the issues with accepting the Paramount deal, highlighted in the letter, was the fact Warner Bros would have to pay Netflix $2.8bn for abandoning their merger agreement.
The board also pointed out that Paramount had a market value of $14bn, but was attempting an acquisition that required more than $94bn in debt and equity financing.
“The extraordinary amount of debt financing, as well as other terms of the [Paramount] offer, heighten the risk of failure to close, particularly when compared to the certainty of the Netflix merger,” the letter said.
Paramount has been contacted for comment.
In mid-December, Netflix co-chief executive Ted Sarandos said the deal between the streaming giant and Warner Bros was “in the best interest of stockholders”.