Battle for Warner Bros. Discovery: Shareholders Favor Strategic Split Over Hostile Takeover

Warner Bros. Discovery (A) US9344231041

The future of Warner Bros. Discovery (A) hangs in the balance as two starkly divergent proposals compete for control. The outcome will determine whether the media giant is dismantled for its prime assets or sold off in its entirety, a decision that is already shaping the company's share price.

While the board and a majority of shareholders appear to favor one path, significant regulatory obstacles have emerged. On January 24, 2026, FCC Chairman Brendan Carr voiced substantial antitrust concerns regarding a potential combination of Netflix's distribution platform with Warner Bros. Discovery's vast content library. The agency fears such a merger could create an excessively dominant market position.

This regulatory scrutiny presents a major challenge, even for the currently preferred transaction. The review process under the Hart-Scott-Rodino Act is projected to last 9 to 12 months. Complicating matters further, Paramount has filed a lawsuit challenging the exclusivity of Netflix's negotiations, injecting additional legal uncertainty into an already complex situation.

Key upcoming dates in the process are:
* Paramount offer expiration: February 20, 2026
* Expected shareholder vote: April 2026

Two Competing Visions for the Media Giant

The battle features two fundamentally different bids. Netflix has presented a cash offer of $82.7 billion, targeting only the premium segments of the business. The streaming leader is specifically interested in the streaming operations and major studio assets, including Warner Bros. Pictures, HBO, and DC Studios. Netflix co-CEO Greg Peters has indicated that the company intends to retain HBO's creative teams post-acquisition, providing them access to a "larger audience."

In contrast, Paramount Skydance has structured a hostile bid for the entire company, valuing Warner Bros. Discovery at $108.4 billion, or approximately $30 per share. Despite the nominally higher price, market participants are skeptical of the financing. The offer is heavily leveraged, involving roughly $55 billion in debt and relying additionally on a personal guarantee of $40.4 billion from Oracle founder Larry Ellison.

The market is pricing in these distinctions. Shares currently trade below the Paramount bid but above the implied value of the Netflix asset deal. This pricing reflects doubts about the feasibility of the Paramount offer alongside underlying confidence in the Netflix scenario.

Overwhelming Shareholder Rejection of the Leveraged Buyout

Resistance to the Paramount Skydance plan is most evident in the tender offer results. The consortium was forced to extend its takeover deadline to February 20, 2026, due to tepid shareholder support.

The data reveals a clear stance:
* Approximately 93% of voting shareholders have rejected the Paramount offer to date.
* Only about 7%, or 168.5 million shares, have been tendered—a very modest volume.
* Investors cite the deal's high debt load and Ellison's personal guarantee as central risk factors.

The current preference among investors is for the greater certainty and liquidity of Netflix's all-cash proposal (around $27.75 per share for the targeted assets) over the higher-priced but debt-laden full acquisition by Paramount. Market observers interpret this overwhelming shareholder rejection as a clear signal in favor of the strategic breakup pursued by Netflix.

Market Perspective and Price Action

The stock market is weaving together the threads of acquisition speculation, debt risk, and regulatory power. Shares closed Friday at €24.08, positioning the price significantly below the Paramount bid yet firmly above levels seen before the bidding contest began.

The massive 93% shareholder rejection of the Paramount offer is currently providing a floor for the share price, as the market increasingly aligns with the Netflix narrative. Simultaneously, the critical comments from the FCC are capping near-term upside potential by highlighting the risk of a protracted and condition-heavy approval process. The critical question for the coming weeks is whether Paramount will adjust the cash component or structure of its bid before the February 20 deadline, or if attention will shift decisively to the regulatory hurdles facing the Netflix deal.