Name: Warner Bros. Discovery tells shareholders to reject Paramount offer, recommends Netflix merger
Uploaded: 2026-01-07T12:48:59+00:00
Duration: 631 s

Speakers

Joe Kernen — Co-Anchor, Squawk Box

David Faber — Anchor, Squawk on the Street / Media Analyst

Andrew Ross Sorkin — Co-Anchor, Squawk Box

Summary

CNBC's David Faber reports that Warner Bros. Discovery's board unanimously rejected Paramount's tender offer and recommended the Netflix merger. The discussion focuses on the competing bids, Paramount's debt and leverage concerns, and the valuation of the Global Networks spin-off stub. Hosts debate whether WBD shareholders should prefer Paramount's cash bid over the Netflix deal and compare the stub to Comcast's Versant spin-off.

WBD board rejects Paramount tender and backs Netflix merger.
Paramount's revised offer includes Larry Ellison's personal guarantee for $40.4 billion in equity.
WBD board cites breakup fees, debt exchange fees, bridge loan, and leverage risks.
Paramount offers $30/share cash; Netflix deal value is around $27.40 after collar impact.
Discussion questions how to value Global Networks stub given Versant's low multiple.
Joe Kernen argues WBD shareholders would prefer $32 cash and no spin-off.
David Faber notes Global Networks has $15 billion of debt and high leverage.
Versant's low multiple may reflect forced selling from index funds.

Ideas

Andrew Ross Sorkin Co-Anchor, Squawk Box 3:46

Paramount debt makes higher bid harder

Warner Bros. Discovery's rejection is eroding Paramount's quality by highlighting its heavy debt load and the risks of a massive leveraged buyout; if Paramount raises its bid by a few dollars, the debt problem does not improve and may worsen, making the deal harder to justify or accept.

Joe Kernen Co-Anchor, Squawk Box 6:40

Global Networks stub worth less

He doubts the Global Networks spin-off stub is worth the stated $4–$5, believing it should be valued below Versant, which has a market cap under $6 billion and faces forced selling from holders who do not want the stock; he expects many investors to sell the stub when it can trade.

David Faber Anchor, Squawk on the Street / Media Analyst 7:14

Versant cheap if forced selling abates

Versant's multiple to EBITDA is incredibly low, and he hopes that is due to forced selling from index funds and other holders who received unwanted stock; if that forced selling explains the discount, the low multiple could present an opportunity.

David Faber Anchor, Squawk on the Street / Media Analyst 7:36

Global Networks stub value looks poor

Applying Versant's low EBITDA multiple to Global Networks, given its leverage structure and $15 billion of debt, yields little value; its leverage ratio could be as high as its EBITDA multiple, maybe even higher, which is not good for the stub.

Joe Kernen Co-Anchor, Squawk Box 7:58

Prefers Paramount cash over Netflix deal

He would favor Paramount's $32 all-cash offer for Warner Bros. Discovery over the Netflix merger because the Netflix deal includes a Global Networks spin-off stub whose value is uncertain and there are still collar and spinoff mechanics outstanding; an all-cash bid removes those risks and is hard to turn down.

This CNBC video, published January 07, 2026, features Andrew Ross Sorkin, Joe Kernen, David Faber discussing PSKY, Global Networks, Versant, WBD. 5 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Andrew Ross Sorkin, Joe Kernen, David Faber · Tickers: PSKY, Global Networks, Versant, WBD

Warner Bros. Discovery tells shareholders to reject Paramount offer, recommends Netflix merger

Summary

Ideas

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