Warner Bros rejects updated Paramount takeover bid, backs Netflix deal

Paramount amended its hostile takeover bid in mid-December to include an over-$40 billion personal financing guarantee from tech titan Larry Ellison, an ally of US President Donald Trump.

Ellison's son David is the CEO of Paramount Skydance, which controls the historic Hollywood studio as well as a host of TV groups, including CBS.

The board "has unanimously determined that Paramount Skydance's tender offer... is not in the best interests of WBD and its shareholders and does not meet the criteria of a 'Superior Proposal' under the terms of WBD's merger agreement with Netflix," Warner Bros said in a statement.

Netflix shocked the industry on December 5 by announcing it had sealed an agreement to buy the film and television studio and HBO Max streaming business for nearly $83 billion, the entertainment industry's biggest consolidation deal this decade.

Three days later, Paramount launched an all-cash tender offer valuing the entertainment giant at $108.4 billion.

It amended its proposal weeks later, seeking to address concerns about the sizable debt financing required for the offer.

"Paramount's offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed," Warner Bros board chairman Samuel Piazza said Wednesday.

Unlike Netflix's offer, Paramount's bid includes the buyout of cable channels such as CNN, TNT, TBS and Discovery -- which would be added to its group of TV assets like CBS, MTV and Comedy Central.

The bidding war that will reshape Hollywood and US media has drawn White House attention, and is likely to face major regulatory scrutiny.

Trump has said he will be "involved" in any decision on the merger.