Image Source: Nick Youngson CC BY-SA 3.0 Alpha Stock Images

Warner Bros Discovery Inc. (WBD) is preparing to recommend that shareholders reject Paramount Global’s $108 billion hostile takeover offer, with the board debating terms that question the strength of financial backing from Larry Ellison, according to a Financial Times report.

The Hollywood group, led by Chief Executive David Zaslav, could announce its position as soon as Wednesday after holding several days of deliberations.

Paramount (PSKY), run by David Ellison, went directly to investors last week with a $30-per-share all-cash tender offer after losing its own contest for the studio and streaming assets to Netflix (NFLX).

WBD questions Ellison’s financing assurances

WBD’s filing is expected to outline four key objections to Paramount’s bid, including concerns about valuation, funding commitments, regulatory risk, and deal structure. In particular, directors have zeroed in on assurances that Oracle co-founder Larry Ellison would personally backstop the transaction.

The current plan relies on the Ellison family trust, largely funded through Oracle stock, rather than Ellison’s personal wealth.

Board approval for the filing is still pending, and the timing could slip, the people said. Shares in Warner Bros Discovery rose nearly 1% to around $29 on Tuesday, indicating investor expectations that Paramount may need to raise its offer to stay in the contest.

Netflix ahead with higher certainty

Netflix’s $83 billion offer for WBD’s film and streaming assets, struck earlier this month, valued the company at $23.25 in cash and $4.50 in stock, excluding its remaining television networks such as CNN.

WBD executives and investors have described Netflix’s proposal as more credible and better structured than Paramount’s bid.

The streaming giant also agreed to a $5.8 billion termination fee—an unusually high amount that signals confidence in obtaining regulatory approval.

Paramount has countered that Netflix’s bid faces greater antitrust scrutiny, given its dominant market position, and therefore poses higher execution risk.

David Ellison, who leads Paramount, has said his group remains willing to negotiate and potentially increase its offer if WBD engages further.

Sovereign wealth funds under review

Another focus of WBD’s review surrounds the financing sources for both bidders.

More than $24 billion of funding tied to Paramount’s proposal originates from sovereign wealth funds in Qatar, Saudi Arabia, and Abu Dhabi, roughly double the amount the Ellisons are committing.

That composition could trigger additional regulatory review, WBD’s advisors believe.

The company’s forthcoming filing will underscore its confidence in Netflix’s approach, while stressing openness to new terms from Paramount if financing concerns are resolved. Both Warner Bros Discovery and Paramount declined to comment.

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