WBD Acquisition Bids Analysis

Independent Research Report: Comparative Analysis of Strategic Acquisition Proposals for Warner Bros. Discovery

Date: December 18, 2025

Subject: Comprehensive Evaluation of Competing Bids from Netflix, Inc. and Paramount Global (Skydance)

Prepared For: Institutional Investment Committee, Risk Arbitrage Desk, and Strategic Planning Group

Executive Summary

The global media and entertainment sector stands at a defining inflection point, crystallized by the current contest for control of Warner Bros. Discovery (WBD). As of mid-December 2025, WBD finds itself the target of two structurally distinct and strategically divergent acquisition proposals. This report provides an exhaustive, independent analysis of the competing bids: a definitive merger agreement with Netflix, Inc. valuing the company’s studio and streaming assets at a headline price of $27.75 per share (plus a spin-off of linear assets), and a hostile, all-cash tender offer from Paramount Global (controlled by Skydance Media) for the entire entity at $30.00 per share.

Our analysis suggests that while the Paramount offer presents a superficially higher nominal value and the allure of immediate liquidity, it is encumbered by significant execution risks, uncompensated termination liabilities, and a financing structure that the WBD Board has justifiably characterized as "illusory." Conversely, the Netflix proposal, though complex in its reliance on a pre-merger spin-off of the "Discovery Global" linear networks, offers a more robust value preservation mechanism through the combination of investment-grade consideration and a "stub" equity component that provides asymmetric upside leverage.

The following report dissects the financial engineering, strategic rationales, regulatory landscapes, and corporate governance dimensions of this historic bidding war. It concludes that the WBD Board’s recommendation to proceed with the Netflix transaction is grounded in a prudent assessment of risk-adjusted value, despite the optical challenge of rejecting a higher all-cash headline number.

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Part I: The Strategic Context – A Media Giant at a Crossroads

To rigorously evaluate the merits of the competing bids, one must first deconstruct the precarious operational and financial reality of Warner Bros. Discovery entering the fourth quarter of 2025. Formed from the April 2022 merger of Discovery Inc. and AT&T’s WarnerMedia, the conglomerate was architected to be a "pure-play" content powerhouse capable of bridging the divide between legacy linear television and the burgeoning streaming economy. However, the subsequent three years have exposed the fragility of this hybrid model, creating the conditions that effectively necessitated a strategic exit.

1.1 The Bifurcated Operational Reality

WBD operates as a "two-speed" organization, a dynamic that has persistently depressed its valuation multiples relative to pure-play peers. The company effectively houses two distinct businesses with diametrically opposing growth profiles and capital requirements.

The Growth Engine: Studios and Streaming

The "Warner Bros." segment—comprising the Warner Bros. Pictures film studio, the Warner Bros. Television production unit, DC Studios, and the direct-to-consumer (DTC) streaming service HBO Max (now simply "Max")—represents the company's crown jewels. These assets control some of the most valuable intellectual property in the history of media, including the Harry Potter wizarding world, the Game of Thrones franchise, and the DC Comics universe. Under the stewardship of CEO David Zaslav, this segment has successfully transitioned from a period of heavy investment to profitability. In the third quarter of 2025 alone, the Studios and Streaming unit generated over $1.3 billion in Adjusted EBITDA, a remarkable turnaround from the multi-billion dollar losses incurred during the initial phases of the streaming wars.1 This segment is the primary target of the Netflix acquisition proposal, as it offers the scale, library depth, and production infrastructure required to sustain dominance in the global SVOD (Subscription Video on Demand) market.

The Cash Cow in Decline: Global Linear Networks

Conversely, the Global Linear Networks segment—encompassing cable stalwarts such as CNN, TNT, TBS, Discovery Channel, HGTV, and Food Network—has historically served as the financial engine of the company, generating the free cash flow necessary to service the debt load inherited from the AT&T merger. However, this engine is sputtering at an accelerating rate due to the secular phenomenon of cord-cutting. In the third quarter of 2025, revenue for the Linear Networks segment plummeted by 22%, while Adjusted EBITDA fell by 20% year-over-year.1 The structural decline of the pay-TV bundle has eroded subscriber fees and advertising revenue simultaneously, turning what was once a stable annuity into a distressed asset class. This deterioration is the primary driver of the "conglomerate discount" applied to WBD stock, as investors have been unwilling to assign premium multiples to a business heavily exposed to the collapsing linear ecosystem.

1.2 The Sovereign Burden of Debt

The defining constraint on WBD’s strategic optionality has been its balance sheet. The company exited the 2022 merger with a massive gross debt load, which stood at approximately $35.6 billion as of September 2025.2 While management has aggressively deleveraged—repaying over $1.2 billion in Q3 2025 alone 3—the leverage ratio remains elevated due to the concurrent contraction in EBITDA from the linear segment. This debt overhang has hamstrung WBD’s ability to compete aggressively for premium sports rights (evidenced by the precarious status of its NBA rights renewal) and restricted its capacity for opportunistic M&A or shareholder returns. The debt burden effectively forced the board’s hand, necessitating a strategic review that would unlock the value of the studio assets by decoupling them from the debt-laden linear business.

1.3 The Strategic Review and the Board's Mandate

In October 2025, facing stagnant stock performance and the relentless erosion of the linear business, the WBD Board of Directors formally initiated a review of strategic alternatives.4 The mandate was clear: maximize shareholder value by exploring all options, including a sale of the entire company, a separation of the studio and network businesses, or a merger with a strategic partner. This review process, conducted with the assistance of independent financial and legal advisors, precipitated the current bidding war. It is crucial to note that this was not a sudden fire sale, but a deliberate, board-driven process designed to resolve the structural contradictions of the post-merger entity. The subsequent arrival of Netflix and Paramount as suitors validates the board’s thesis that the sum of WBD's parts is significantly greater than its current market capitalization, provided the right structural catalyst is applied.

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Part II: The Netflix Merger Proposal – Anatomy of a Transformational Deal

On December 5, 2025, WBD announced it had entered into a definitive merger agreement with Netflix, Inc..5 This transaction is not merely an acquisition but a complex corporate reorganization that fundamentally reshapes the media landscape. It represents a "friendly" deal, fully endorsed by the WBD Board, and is structured to extract the high-value studio and streaming assets while isolating the challenged linear networks.

2.1 Deal Mechanics and Consideration

The Netflix proposal is a cash-and-stock transaction valued at a headline price of $27.75 per WBD share. The consideration is structured as follows:

* Cash Component: Shareholders will receive $23.25 in cash per share. This cash portion is funded by Netflix, which intends to utilize its investment-grade balance sheet to raise the necessary debt capital. The certainty of this cash component is high, given Netflix's massive market capitalization (exceeding $400 billion) and robust free cash flow generation.

* Stock Component: Shareholders will receive $4.50 in Netflix common stock per share. Crucially, this stock component is protected by a "collar" mechanism. If Netflix's stock price trades between $97.91 and $119.67 at the time of closing, the exchange ratio will float to ensure WBD shareholders receive exactly $4.50 in value. If the stock trades outside this range, the value will be fixed at the upper or lower bound, providing downside protection against a collapse in Netflix's share price while capping upside in a runaway rally.6

* Implied Valuation: The deal values the acquired assets (Studios and Streaming) at an enterprise value of approximately $82.7 billion and an equity value of $72.0 billion.7 This valuation represents a significant premium to WBD’s trading price prior to the deal announcement, reflecting the strategic scarcity value of the Warner Bros. library and production capabilities.

2.2 The "Discovery Global" Spin-Off: The Deal's Keystone

The structural linchpin of the Netflix transaction is the pre-closing spin-off of WBD’s Global Linear Networks business. Before Netflix acquires the studio and streaming assets, WBD will transfer its portfolio of cable networks (CNN, TNT, TBS, Discovery, etc.) into a newly formed, publicly traded company tentatively referred to as "Discovery Global" or "SpinCo".7

Asset and Liability Allocation:

* Assets: Discovery Global will retain the entirety of the linear television portfolio, including the domestic cable networks and international free-to-air channels. It will essentially be a "pure-play" linear cable company, similar in profile to the former Discovery Inc. or AMC Networks.

* Debt: A critical (and contentious) aspect of the deal is the allocation of debt. Reports indicate that WBD plans to load the SpinCo with a "targeted level of debt," estimated to be between $15 billion and $30 billion.8 This maneuver effectively "cleanses" the studio and streaming assets of the toxic leverage, delivering a pristine balance sheet to Netflix. The exact amount of debt transferred is subject to a "Net Debt Adjustment" mechanism: if SpinCo takes less debt than targeted, the cash consideration paid by Netflix to WBD shareholders will be reduced dollar-for-dollar.6

Shareholder Impact:

WBD shareholders will receive shares in Discovery Global on a pro-rata basis in addition to the $27.75 cash/stock consideration. Therefore, the total value of the Netflix proposal is theoretically $27.75 + Value of SpinCo Share. This "stub" equity represents a call option on the future cash flows of the linear business. Even in a distressed scenario, these assets generate significant cash flow, suggesting the equity value is non-zero.

2.3 Strategic Rationale for Netflix and WBD

For the WBD Board, the Netflix deal achieves three primary objectives:

1. Certainty of Value: The $23.25 cash component locks in a substantial portion of the company's value, shielding shareholders from further erosion in the linear business.

2. Structural Solution: It permanently resolves the "conglomerate discount" by separating the growth assets from the declining ones.

3. Regulatory Insurance: Recognizing the antitrust hurdles, Netflix has agreed to a record-breaking $5.8 billion reverse termination fee.9 If regulators block the deal, Netflix must pay this amount to WBD. This fee serves as a massive insurance policy, equating to approximately $2.34 per share, which significantly de-risks the transaction for WBD shareholders.

For Netflix, the acquisition is a definitive move to cement its dominance. By acquiring the Warner Bros. studio lot and its century-deep library, Netflix transitions from a technology platform that licenses content to a fully integrated Hollywood major. It secures a permanent supply of premium IP (DC, Harry Potter) to feed its global subscriber base, reducing its reliance on third-party licensing and mitigating the risk of content clawbacks by competitors.

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Part III: The Paramount Tender Offer – Financial Engineering or Strategic Necessity?

Three days after the Netflix announcement, on December 8, 2025, Paramount Global (under the control of Skydance Media and the Ellison family) launched an unsolicited, hostile tender offer for Warner Bros. Discovery.10 This bid bypasses the WBD Board and appeals directly to shareholders, framing itself as a superior, simpler, and more valuable alternative.

3.1 Deal Mechanics and Valuation

The Paramount offer is a straight forward all-cash tender offer to acquire 100% of WBD’s outstanding shares for $30.00 per share.

* Total Enterprise Value: The offer implies an enterprise value of $108.4 billion.10

* Equity Value: Based on approximately 2.48 billion shares outstanding, the total equity value is approximately $74.4 billion.

* Scope: Unlike the Netflix deal, Paramount proposes to acquire the entirety of WBD, including the Global Linear Networks. There is no spin-off, no complex separation of assets, and no "stub" equity. Shareholders would simply tender their shares and receive cash.

3.2 The Financing Controversy: The "Illusory" Backstop

While the $30.00 headline price is ostensibly superior to the Netflix cash/stock component ($27.75), the credibility of the financing backing this offer has become the central point of contention. The WBD Board has aggressively characterized the financing as "illusory" and "inadequate" 11, citing several critical flaws:

The Revocable Trust Structure:

The equity portion of the financing—totaling approximately $40.65 billion—is not backed by a binding commitment letter from a corporation or a private equity fund with committed capital. Instead, it relies on the Lawrence J. Ellison Revocable Trust.12 WBD’s legal advisors argue that a revocable trust is fundamentally insecure; by definition, the grantor (Larry Ellison) can amend the trust, withdraw assets, or change beneficiaries at any time. The board explicitly stated, "A revocable trust is no replacement for a secured commitment by a controlling stockholder".13

Liability Caps and Capital Flight:

Furthermore, the trust’s liability in the event of a funding failure is reportedly capped at just $2.8 billion, representing only ~7% of the total commitment.14 This creates a moral hazard: if market conditions deteriorate or the deal becomes less attractive, the Ellisons could theoretically walk away, paying a relatively small break fee while leaving WBD in chaos. Adding to the instability, the bid initially included backing from Affinity Partners (Jared Kushner’s private equity firm) and sovereign wealth funds including the Saudi Public Investment Fund (PIF) and Qatar Investment Authority. However, on December 16, 2025, Affinity Partners formally withdrew its participation following political backlash and negative comments from President-elect Trump regarding the deal.15 This withdrawal leaves a multi-billion dollar hole in the capital stack and casts doubt on the solidity of the remaining foreign backing.

3.3 Strategic Rationale for Paramount

Paramount attempts to frame its bid as strategically superior based on three pillars:

1. Immediate Liquidity: The offer provides $30.00 in certain cash, avoiding the volatility of Netflix stock and the uncertain trading value of the Discovery Global SpinCo.

2. Regulatory Argument: Paramount argues that a merger between two "smaller" legacy media companies (Paramount and WBD) is more likely to survive antitrust scrutiny than a vertical integration by the dominant market leader (Netflix). They position the deal as "pro-competitive," creating a stronger counterweight to Big Tech giants like Amazon, Apple, and Netflix itself.17

3. Synergies: Paramount claims the combination would unlock $9 billion in synergies, largely driven by consolidating their respective studio operations and linear network portfolios.14 The WBD Board has dismissed this figure as "operationally ambitious" and warned that such deep cuts would "make Hollywood weaker, not stronger" by reducing the number of buyers for creative content.

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Part IV: The Valuation Battlefield – A Granular Financial Comparison

The central question facing WBD shareholders is a mathematical inequality: Is $27.75 + Value(SpinCo) greater than $30.00? On the surface, Paramount’s offer appears superior by $2.25 per share. However, a rigorous analysis of the "Discovery Global" SpinCo and the hidden costs of termination fees reveals a far more nuanced reality.

4.1 The "Gap" Analysis and SpinCo Valuation

The spread between the Netflix headline price ($27.75) and the Paramount offer ($30.00) is $2.25 per share. With approximately 2.48 billion shares outstanding 18, this gap implies a total value of roughly $5.6 billion. For the Netflix deal to be financially superior, the market capitalization of the standalone "Discovery Global" entity must exceed this threshold immediately upon trading.

Valuing the "Stub" Equity:

The valuation of Discovery Global is highly sensitive to the amount of debt allocated to it.

* EBITDA Baseline: The Linear Networks segment generated roughly $9.0 billion in Adjusted EBITDA over the last twelve months, though this figure is declining at a rate of ~20% annually.1

* The Debt Lever: If WBD allocates the upper estimate of $30 billion in debt to SpinCo 8, the equity value becomes perilous. Assuming a conservative forward EV/EBITDA multiple of 4.0x on estimated 2026 EBITDA of ~$5.7 billion (after two years of 20% declines), the Enterprise Value would be ~$22.8 billion. Subtracting $30 billion in debt results in a negative equity value of -$7.2 billion. In this scenario, the SpinCo shares are essentially worthless, acting only as out-of-the-money options.

* The Low-Debt Scenario: However, if WBD allocates a more manageable $15 billion in debt, the math shifts dramatically.

* Enterprise Value: $22.8 billion

* Net Debt: $15.0 billion

* Equity Value: $7.8 billion

* Per Share Value: ~$3.15

* Total Netflix Package: $27.75 + $3.15 = $30.90

In this low-debt scenario, the Netflix package marginally exceeds the Paramount offer. However, the "Net Debt Adjustment" clause complicates this. If WBD puts less debt on SpinCo (increasing its equity value), the cash payment from Netflix ($23.25) decreases to compensate for the higher net assets retained.6 This creates a zero-sum dynamic that caps the total value. The WBD Board likely has internal projections suggesting the SpinCo can support a capital structure that preserves at least $2.00-$3.00 of equity value per share, bridging the gap to the Paramount bid.

4.2 The "Poison Pill" of Termination Fees

A decisive financial factor often obscured by the headline price is the Termination Fee. Because WBD has already signed a definitive agreement with Netflix, accepting the Paramount offer would trigger significant breakup costs.

* The WBD Liability: If WBD terminates the Netflix agreement to accept a superior proposal, it is contractually obligated to pay Netflix a $2.8 billion termination fee.14

* The Paramount Void: Crucially, Paramount’s tender offer documents do not explicitly offer to reimburse WBD for this fee.14 This means the cost would likely be borne by WBD's balance sheet, reducing the net equity value available to shareholders.

* Debt Breakage Costs: Additionally, the WBD Board estimates that terminating the Netflix deal would trigger approximately $1.5 billion in financing breakage costs related to planned debt exchanges.14

* Net Value Calculation:

* Total Deal Value: $30.00 per share

* Less: Termination Fee Impact ($2.8B / 2.48B shares) = ~$1.13 per share

* Less: Debt Breakage Impact ($1.5B / 2.48B shares) = ~$0.60 per share

* Effective Paramount Price: $30.00 - $1.73 = ~$28.27 per share

Synthesized Insight: When adjusted for these friction costs, the Paramount offer's premium over the Netflix deal ($27.75) evaporates almost entirely, shrinking to a negligible ~$0.52 per share ($28.27 vs $27.75). This creates a scenario where shareholders are being asked to accept massive execution risk—including the potential collapse of the deal due to financing failures—for virtually no additional risk-adjusted value. This calculation is the bedrock of the WBD Board's "inadequate value" argument.

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Part V: The Regulatory Gauntlet – Antitrust, Politics, and Global Hurdles

Both transactions face a grueling regulatory review process, but the nature of the risks differs fundamentally. The regulatory environment is currently characterized by aggressive enforcement from the DOJ and FTC, compounded by the unpredictable influence of the incoming Trump administration.

5.1 The Netflix Antitrust Risk: Horizontal and Vertical Concerns

The Netflix-WBD combination represents a classic "Big Tech" antitrust target.

* Horizontal Concentration: The merger would combine the world’s largest streaming service (Netflix) with a top-tier competitor (Max). Regulators will scrutinize market concentration in the SVOD market, potentially arguing that eliminating Max as an independent competitor harms consumers through higher prices and reduced choice.

* Vertical Foreclosure: Regulators will also examine whether Netflix owning Warner Bros. Studio would lead to "foreclosure"—where Netflix creates exclusive content for its own platform and withholds Warner Bros. movies and shows from rival streamers or theatrical exhibitors.

* The $5.8 Billion Shield: Anticipating these challenges, Netflix has agreed to a massive $5.8 billion reverse termination fee.9 This fee is payable to WBD if the deal is blocked by regulators. It serves a dual purpose: it signals Netflix’s high confidence in its legal strategy and provides WBD shareholders with a valuable "put option." If the deal fails on antitrust grounds, WBD receives a cash injection equivalent to ~8% of its current equity value, significantly cushioning the blow.

5.2 The Paramount Antitrust Risk: The "Failing Firm" Defense

Paramount frames its bid as a "pro-competitive" alternative.

* Counterweight Theory: Paramount argues that a merger between two legacy media companies (WBD and Paramount) creates a necessary counterweight to the dominance of Big Tech entrants (Amazon, Apple, Netflix). They will likely employ a "failing firm" style argument, suggesting that without consolidation, both companies will struggle to survive against the tech giants.

* News Concentration: However, this deal faces a unique hurdle: News. Combining CBS News (Paramount) and CNN (WBD) would create a broadcast and cable news behemoth. This concentration of journalistic power would invite intense scrutiny from the FCC and political actors, potentially requiring the divestiture of one of the news networks—a complex and value-destroying process.

5.3 The Political Wildcard: Trump and the "Taint"

The geopolitical and domestic political context adds a layer of volatility rarely seen in M&A.

* The Trump Factor: President-elect Trump has publicly commented that the Netflix deal "could be a problem" due to its size 15, signaling a continuation of populist antitrust enforcement. However, his relationship with the parties involved is complex. He has feuded publicly with the Ellison family (owners of Paramount/Skydance) and has a long-standing animosity toward CNN.

* Capital Flight: The withdrawal of Jared Kushner’s Affinity Partners from the Paramount bid 16 was ostensibly a move to de-risk the deal politically. However, it also removed a potential channel of communication with the incoming administration. The presence of sovereign wealth funds (Saudi PIF, Qatar) in the original Paramount capital stack 16 had already raised concerns about foreign influence over American cultural assets, a topic that could trigger a review by the Committee on Foreign Investment in the United States (CFIUS).

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Part VI: Corporate Governance and the "Taint" of Process

Paramount has accused the WBD Board of conducting a flawed process, alleging that the board "never engaged meaningfully" with their proposals and favored Netflix from the outset.15 This accusation of a "tainted" process is a serious charge that could form the basis of shareholder litigation.

6.1 The Board's Defense: "Illusory" vs. Binding

The WBD Board has mounted a vigorous defense, detailed in their rejection letter to shareholders.11 They characterize the Paramount offer not just as inferior, but as "illusory." This specific choice of legal language is designed to highlight the conditional nature of the Paramount bid compared to the binding nature of the Netflix merger agreement.

* The "Full Backstop" Myth: The board explicitly refutes Paramount's claim of a "full backstop" from the Ellison family. They note that the equity commitment is revocable and capped, creating a scenario where Paramount could abandon the deal if WBD’s business deteriorates further during the pendency of the transaction. In contrast, the Netflix deal is backed by a corporate entity with a $400B+ market cap and no financing contingencies.

* Engagement Record: To counter the "favoritism" narrative, the board revealed that they held "dozens of calls" and "four in-person meetings" with David and Larry Ellison over a three-month period.14 This disclosure is intended to demonstrate that the board fulfilled its fiduciary duty by thoroughly exploring the Paramount option before rejecting it.

6.2 The Existential Risk

The board’s combative stance suggests they view the Paramount hostile bid as an existential threat to the company’s stability. A prolonged hostile takeover battle could distract management, cause talent flight (a critical risk in a creative industry), and leave the company with disclosed confidential information if the deal fails. By labeling the offer "illusory," the board is signaling to institutional shareholders that the risk of non-consummation is too high to justify the marginal price premium.

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Part VII: Market Sentiment and Arbitrage Dynamics

The ultimate adjudication of these competing claims lies in the market's reaction. As of December 17, 2025, WBD stock was trading in the range of $28.50 - $28.90.19 This price action offers critical insights into investor sentiment.

* Trading Below the Offer: The fact that WBD is trading below Paramount's $30.00 offer indicates that the market assigns a low probability to the Paramount deal closing. If arbitrageurs believed the $30 deal was secure and likely to close within a year, the stock would trade closer to $29.00-$29.50 (accounting for the time value of money). The discount reflects the perceived risks regarding financing and regulatory approval.

* Trading Above the Netflix Cash Floor: Conversely, the stock is trading significantly above the cash component of the Netflix deal ($23.25) and slightly above the total headline price ($27.75). This suggests two possibilities:

1. Option Value: The market believes the Paramount bid, while flawed, effectively puts a "floor" under the stock price and may force Netflix to sweeten its offer (e.g., by increasing the cash component) to secure the deal.

2. SpinCo Valuation: Investors may be assigning a higher value to the "Discovery Global" SpinCo stub than the implicit zero-value in the bear case. If the market values the SpinCo at even $1.50 per share, the total Netflix package value approaches the $30 mark.

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Part VIII: Conclusion and Strategic Outlook

The battle for Warner Bros. Discovery is a contest between two fundamentally different visions of the future: a complex, strategic transformation that aligns the company with the winner of the streaming wars (Netflix), versus a financial exit that offers immediate cash but carries significant structural risks (Paramount).

Final Verdict:

Based on the totality of the evidence—financial, structural, and regulatory—the WBD Board’s recommendation to reject the Paramount tender offer is valid. While the $30.00 all-cash offer is superficially attractive, a rigorous "look-through" analysis reveals that it offers negligible effective value premium over the Netflix proposal once termination fees and debt breakage costs are deducted. Furthermore, the lack of a secure, irrevocable equity backstop exposes shareholders to unacceptable execution risk.

Strategic Outlook:

* Netflix: Is likely to prevail, but may be compelled to make a tactical adjustment to its offer—such as increasing the cash component by $1.00-$2.00 per share—to definitively kill the Paramount threat and secure shareholder approval.

* Paramount: Having played its hand with a hostile bid, Paramount faces a difficult path. Without a binding equity commitment from the Ellisons, their offer lacks the credibility to dislodge the Netflix agreement. Their best hope is a regulatory intervention that blocks the Netflix deal, forcing WBD back to the table.

* Shareholders: The prudent course of action is to support the Netflix transaction. It offers a cleaner path to value realization, a massive regulatory termination fee as insurance, and the potential upside of the Discovery Global stub—an asset that, despite its challenges, retains intrinsic value in a consolidating media landscape.

Metric

Netflix Merger Proposal

Paramount Tender Offer

Headline Price

$27.75 ($23.25 Cash + $4.50 Stock)

$30.00 (All Cash)

Additional Consideration

Shares in "Discovery Global" SpinCo

None (Linear Assets Acquired)

Implied Ent. Value (EV)

~$82.7 Billion (Excludes Linear)

~$108.4 Billion (Includes Linear)

Reverse Break-Up Fee

$5.8 Billion (Payable to WBD)

Not Covered / $5.0 Billion Proposed 14

WBD Termination Fee

$2.8 Billion (Payable by WBD)

Not Explicitly Covered by Buyer

Financing Source

Investment Grade Balance Sheet

New Equity (Revocable Trust) + Debt

Board Recommendation

Recommended

Rejected

End of Report