Shareholder Revolt Erupts Over Warner Bros. Discovery’s Strategic Crossroads

A significant investor rebellion is taking shape at Warner Bros. Discovery. Activist shareholder Ancora Holdings has publicly demanded the board of directors halt a proposed merger with Netflix, threatening a proxy battle if its concerns are ignored.

The situation presents a stark strategic choice for the media conglomerate. While company leadership favors a complex combination with streaming giant Netflix, a competing acquisition proposal from Paramount Skydance remains on the table. Ancora, which holds an investment position valued at approximately $200 million, has now taken a definitive stand.

The timing of Ancora's intervention is strategic. Paramount Skydance has recently enhanced the terms of its unsolicited takeover offer. The revised proposal includes several key financial improvements:

• An all-cash bid of $30 per share.
• A "ticking fee" of $0.25 per share per quarter should the deal close after December 31, 2026.
• Assumption of a $2.8 billion breakup fee payable to Netflix by Warner Bros. Discovery.
• Coverage of up to $1.5 billion in potential refinancing costs related to debt restructuring.

Financing for the deal appears secured, with the Ellison family and RedBird Capital providing $43.6 billion in equity, supported by an additional $54 billion in debt financing.

Activist Investor Delivers Scathing Critique

In a presentation released on Thursday, Ancora labeled the Netflix transaction as "flawed, inferior, and highly risky." The Netflix offer values Warner Bros. Discovery at roughly $27.75 per share, a mix of cash and stock in a new spin-off entity tentatively named "Discovery Global."

Should investors sell immediately? Or is it worth buying Warner Bros. Discovery (A)?

The investor has announced its intention to vote against the Netflix deal. Should the board refuse to reconsider, Ancora is prepared to initiate a proxy fight at the shareholder meeting scheduled for Spring 2026. A core argument from the activist is that a merger with Netflix would face substantial regulatory antitrust challenges, given Netflix's already dominant position in the streaming market.

Market Reaction and Board Stance

Warner Bros. Discovery shares currently trade near $28, a price point that sits between the values implied by the two competing proposals. This suggests investors are weighing the certainty of Paramount's cash offer against the uncertainties embedded in the Netflix share-and-spin-off structure. Particular skepticism surrounds the plan to spin off linear cable networks into "Discovery Global," as the valuation of that new entity would be heavily dependent on future leverage levels.

The company's board has stated it is reviewing the improved offer from Paramount but continues to recommend the Netflix transaction to shareholders. A vote is expected in April 2026.

With Ancora's public campaign, a well-funded opponent has now entered the fray. The coming weeks will reveal whether other major investors join this rebellion or if the board decides to alter its strategic course.