Warner Bros. rejected Paramount's purchase offer - $20 per share wasn't enough

Warner Bros. Discovery Inc. rejected the first purchase offer from Paramount Skydance, considering the proposed amount too low. According to Bloomberg, Paramount valued Warner Bros. shares at 20 dollars a piece, but the company's management decided that this price did not reflect the real value of the media giant.

What's known about Paramount's offer

Paramount's interest in buying Warner Bros. was first expressed in September 2025. After the first news of the possible merger, Warner Bros. shares rose nearly 30%, confirming the high level of investor interest in the deal.

Nevertheless, as of October 10, Warner Bros. stock was worth $17.10 and the company's market capitalization was about $42.3 billion.

Why the deal didn't go through

The main reason for the rejection was undervaluation.

According to Warner Bros. management, the proposed 20 dollars per share did not take into account the studio's potential, its portfolio of franchises and assets in the streaming services sphere.

The company's assets include brands such as DC Studios, HBO, Warner Bros. Pictures, Discovery Channel and other brands that generate sustainable revenue and build a strong position in the entertainment market.

What comes next

Now Paramount and David Ellison, the initiator of the deal, are considering several scenarios:

• Hike the offer - increase the price per share to interest the Warner Bros. board of directors;
• Go directly to shareholders - if management continues to refuse;
• Find an investor partner - to share financial risk and strengthen the bargaining position.

Possible merger is one of the largest in history

If a deal between Warner Bros. Discovery and Paramount Global, it could be one of the largest mergers in the history of the U.S. media industry.

Such a merger would create a powerful conglomerate with a vast catalog of films, series and streaming platforms to compete with Disney, Netflix and Amazon Studios in the global marketplace.

Bottom line

So far, negotiations between the studios are far from over.

Warner Bros.' rejection of the first offer does not put an end to the deal, but it clearly shows that the company expects a much higher valuation. Paramount, on the other hand, will have to decide whether it's willing to pay more - or look for a new way to strengthen its media assets.