Warner Bros. Discovery has sharply rejected Paramount’s hostile offer, alleging the $108-billion deal carries substantial risks because the Larry Ellison family has failed to put real money behind its bid for Warner’s legendary movie studio, HBO and CNN.

Paramount “has consistently misled WBD shareholders that its proposed transaction has a ‘full backstop’ from the Ellison family,” Warner Bros. Discovery’s board wrote Wednesday in a letter to its shareholders filed with the Securities & Exchange Commission.

“It does not, and never has,” the Warner board said.

Warner’s board voted unanimously that Paramount’s hostile bid “was not in the best interests” of its shareholders.

For Warner, what was missing was a clear declaration from Paramount that the Ellison family had agreed to commit funding for the deal. Paramount last week told Warner stockholders that it would pay them $30 a share — or $78 billion for the entire company. Paramount also has said it would absorb Warner’s debt, making the overall deal worth $108-billion.

A Paramount representative was not immediately available for comment Wednesday.

The Warner auction has taken several nasty turns. Last week, Paramount launched its hostile takeover campaign for Warner after losing the bidding war to Netflix. Warner board members on Dec. 4 had unanimously approved Netflix’s $82.7-billion deal for the Warner Bros. film and television studios, HBO and HBO Max.

In its letter, the Warner board reaffirmed its support for Netflix’s $27.75 a share proposal, saying it represented the best deal for shareholders. Warner board members urged investors not to tender their shares to Paramount.

Board members said they were concerned that Paramount’s financing appeared shaky and the Ellison family’s assurances were far from ironclad. Instead Paramount’s proposal contained “gaps, loopholes and limitations,” Warner said, including troubling caveats, such as saying in documents that Paramount “reserve[d] the right to amend the offer in any respect.”

The Warner board argued that its shareholders could be left holding the bag.

Paramount Chairman David Ellison has championed Paramount’s strength in recent weeks saying his company’s bid for all of Warner Bros. Discovery, which includes HBO, CNN and the Warner Bros. film and television studios, was backed by his wealthy family, headed by his father, Oracle co-founder Larry Ellison, one of the world’s richest men.

Ellison sent a letter last week to Warner shareholders, asking for their support. The tech scion wrote his family and RedBird Capital Partners would be strong stewards of Warner’s iconic properties, which include Batman, Harry Potter, Scooby-Doo, “The Lord of the Rings,” and HBO’s “Game of Thrones.”

Ellison wrote that Paramount delivered “an equity commitment from the Ellison family trust, which contains over $250 billion of assets,” including more than 1 billion Oracle shares.

In regulatory filings, Paramount has disclosed that, for the equity portion of the deal, it planned to rely on $24 billion from sovereign wealth funds representing the royal families of Saudi Arabia, Qatar and Abu Dhabi as well as $11.8 billion from the Ellison family (which also holds the controlling shares in Paramount).

This week, President Trump’s son-in-law Jared Kushner’s Affinity Partners private equity firm pulled out of Paramount’s financing team.

Paramount’s bid would also need more than $60 billion in debt financing.

Paramount has made six offers for Warner Bros., and its “most recent proposal includes a $40.65 billion equity commitment, for which there is no Ellison family commitment of any kind,” the Warner board wrote.

“Instead, they propose that [shareholders] rely on an unknown and opaque revocable trust for the certainty of this crucial deal funding,” the board said, noting that a revocable trust could always be changed. “A revocable trust is no replacement for a secured commitment by a controlling stockholder,” the board’s letter said.

Throughout the negotiations, Paramount, which trades under the PSKY ticker, failed to present a solid financing commitment from Larry Ellison — despite Warner’s bankers telling them that one was necessary, the board said.

“Despite … their own ample resources, as well as multiple assurances by PSKY during our strategic review process that such a commitment was forthcoming – the Ellison family has chosen not to backstop the PSKY offer,” Warner’s board wrote.

David Ellison has insisted Paramount’s offer of $30 a share was superior to Netflix’s winning bid.

Paramount wants to buy all of Warner Bros. Discovery, while Netflix has made a deal to take Warner’s studios, its spacious lot in Burbank, HBO and HBO Max streaming service.

Warner plans to spin off its linear cable channels, including CNN, HGTV, Cartoon Network and TBS, early next year.

Paramount’s lawyers have argued that Warner tipped the auction to favor Netflix.

Paramount, which until recently enjoyed warm relations with President Trump, has long argued that its deal represents a more certain path to gain regulatory approvals. Trump’s Department of Justice would consider any anti-trust ramifications of the deal, and in the past, Trump has spoken highly of the Ellisons.

However, Warner’s board argued that Paramount might be providing too rosy a view.

“Despite PSKY’s media statements to the contrary, the Board does not believe there is a material difference in regulatory risk between the PSKY offer and the Netflix merger,” the Warner board wrote. “The Board carefully considered the federal, state, and international regulatory risks for both the Netflix merger and the PSKY offer with its regulatory advisors.”

The board noted that Netflix agreed to pay a record $5.8 billion if its deal fails to clear the regulatory hurdles.

Paramount has offered a $5 billion termination fee.

Should Warner abandon the transaction with Netflix, it would owe Netflix a $2.8 billion break-up fee.

Warner also pointed to Paramount’s promises to Wall Street that it would shave $9 billion in costs from the combined companies. Paramount is in the process of making $3 billion in cuts since the Ellison family and RedBird Capital Partners took the helm of the company in August.

Paramount has promised another $6 billion in cuts should it win Warner Bros.

“These targets are both ambitious from an operational perspective and would make Hollywood weaker, not stronger,” the Warner board wrote.

The Department of Health and Human Services (HHS) has launched a review into how Minnesota used billions of dollars in federal social service funding, requesting detailed records from Gov. Tim Walz’s administration and other state entities after reports raised questions about whether portions of the money were misused, according to letters first obtained by the New York Post.

The letters were sent Monday by Alex Adams, assistant secretary for the Administration for Children and Families, to Walz, Minneapolis Mayor Jacob Frey and a nonprofit involved in administering Head Start programs, the Post reported.

According to the Post, Adams said HHS is attempting to determine whether federal safety-net funds were diverted or mismanaged and whether such misuse might have “been used to fuel illegal and mass migration” into Minnesota.

Adams told the outlet the review is focused on “accountability for American taxpayers” and on ensuring federal benefit programs were not compromised.

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The Post reported that Minnesota received more than $8.6 billion in ACF funding between fiscal years 2019 and 2025 through more than 1,000 federal grants. In fiscal year 2025 alone, the state received over $690 million for safety-net programs under President Biden, according to federal spending records reviewed by the Post.

In the letters, Adams requested what the Post described as a “comprehensive list” of all state entities that received ACF funding during that period, along with detailed administrative data. The information sought includes recipient names, addresses, dates of birth and, where applicable, Social Security numbers and immigration A-numbers, the Post reported.

Adams told the Post that HHS has “legitimate reason to think that they’ve been using taxpayer dollars incorrectly,” citing recent fraud investigations and allegations involving Minnesota’s Department of Human Services. According to the Post, the letters referenced public statements from hundreds of DHS employees alleging warnings of fraud were disregarded and whistleblowers faced retaliation.

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The review comes amid heightened scrutiny of Minnesota’s handling of federal funds following multiple high-profile fraud cases. Federal prosecutors have charged dozens of individuals in connection with the Feeding Our Future scheme, in which more than $250 million intended for child nutrition programs was diverted for luxury purchases and real estate. Many of those charged had ties to nonprofits serving Minnesota’s Somali community.

The Post also cited Pew Research Center data showing Minnesota’s unauthorized migrant population increased by roughly 40,000 people between 2019 and 2023, reaching an estimated 130,000 residents, or about 2% of the state’s population.

According to the Post, the ACF review includes several major federal programs, including the Community Services Block Grant, Social Services Block Grant, Low-Income Home Energy Assistance Program, Title IV-E Foster Care, Refugee Cash and Medical Assistance, the Child Care and Development Fund, and Parents in Community Action, a Head Start grantee.

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“The Trump Administration has made clear its commitment to rooting out fraud, protecting taxpayer dollars, and ensuring program integrity across all federal benefit programs,” Adams wrote in the letters, according to the Post. “This information is necessary for ACF to conduct a thorough review of program operations and to assess the extent of any irregularities that may have occurred.”

Fox News Digital reached out to Gov. Walz, Mayor Jacob Frey and HHS for comment but did not receive an immediate response.