Film and television conglomerate Warner Bros Discovery Inc. has reportedly declined an initial takeover bid from David Ellison-led Paramount Skydance, citing the offer as "too low." Sources familiar with the matter indicated that Paramount had recently proposed approximately $20 per share for Warner Bros Discovery. Both Paramount and Warner Bros. spokespeople chose not to comment on the reports.

Following this rejection, Paramount is believed to have several strategic alternatives. These include the possibility of increasing its bid, seeking an additional financial partner to bolster its offer, or directly appealing to Warner Bros Discovery's shareholders to exert pressure. Prior reports had highlighted ongoing discussions between the two media giants, with the proposed price identified as a significant point of contention.

At the close of trading on Friday, Warner Bros. shares were valued at $17.10, giving the company a market capitalization of $42.3 billion. Concurrently, Paramount shares stood at $17 each, valuing its entity at $18.6 billion. David Ellison, son of billionaire Larry Ellison, assumed control of Paramount – which encompasses major brands like CBS, Nickelodeon, MTV, and its namesake movie studio – in August, following an $8 billion merger with his film production company, Skydance Media. It has also been reported that Paramount has been in discussions with alternative asset manager Apollo Global Management regarding financial backing for its acquisition attempt.

While David Ellison refrained from commenting specifically on Warner Bros. at a recent Bloomberg Screentime conference, he strongly advocated for increased mergers and consolidation within the media industry. Meanwhile, Warner Bros. Discovery has its own significant strategic plans, intending to split its operations into two distinct businesses next year: one dedicated to cable television and the other focused on streaming services and studio assets. Warner Bros. CEO David Zaslav is reportedly confident that he can secure a substantial premium for the streaming and studio components once they are disentangled from the company's debt-burdened cable networks. Therefore, to successfully complete a deal, Ellison must persuade Zaslav that selling now, prior to this planned separation, would not result in leaving money on the table for Warner Bros. Discovery.