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Warner Bros Discovery has turned down Paramount Skydance's initial takeover proposal, calling the offer too low, according to people familiar with the matter.

Paramount offered about $20 per share recently, but Warner Bros did not accept it.

Paramount, led by David Ellison, is exploring different ways to try again. These include raising the offer, appealing directly to Warner Bros shareholders, or finding financial backing from partners like Apollo Global Management, sources added.

Apollo is an asset manager that Paramount has been in talks with for support.

David Ellison took over Paramount in August after merging his film production company, Skydance Media, with Paramount in an $8 billion deal, Reuters said.

Paramount owns well-known brands like CBS, Nickelodeon, MTV, and the Paramount movie studio.

The talks between Warner Bros and Paramount have not been officially confirmed, as both companies declined to comment on the reports.

Warner Bros Shares Close at $17.10, Valued at $42.3B

According to Billboard, Warner Bros' shares closed at $17.10 last Friday, valuing the company at about $42.3 billion. Paramount's shares are around $17, giving it a market value of $18.6 billion.

At a recent Bloomberg event in Los Angeles, Ellison said he couldn't speak directly about Warner Bros but expressed his interest in more industry mergers.

He said making more films and TV shows would help boost Paramount+ streaming subscriptions.

Ellison also believes Paramount might have an easier time than others getting approval for mergers from Washington regulators.

"There's a lot of options out there," Ellison said, suggesting that he might try different approaches to complete a deal.

Warner Bros is planning to split into two parts: one for cable TV networks and another for streaming and studios.

This split is expected to happen next year. Most of the company's debt will move to the cable networks, which still bring in money but face challenges as more viewers switch to streaming.

Warner Bros CEO David Zaslav expects to get a high price for the streaming and studios businesses after the split.

For Paramount to win a takeover deal, Ellison will have to convince Zaslav that selling early won't cost him money.

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