In a letter to shareholders, disclosed in a regulatory filing, the board wrote that Paramount had "consistently misled" Warner Bros shareholders that its $US108.4 billion ($A163.8 billion), $US30-per-share cash offer was fully guaranteed, or "backstopped," by the Ellison family, led by billionaire and Oracle CEO Larry Ellison.
"It does not, and never has," the board wrote of the guarantee of Paramount's offer, noting that the offer posed "numerous, significant risks".
The board said it found Paramount's offer "inferior" to the merger agreement with Netflix's.
Netflix's $US27.75 per share offer for Warner Bros' film and television studios, its library and the HBO Max streaming service is a binding agreement that requires no equity financing and has robust debt commitments, the board wrote.
Warner Bros has not yet set a date for a shareholder vote on the deal but it is expected to happen sometime in the northern hemisphere spring or early summer, its chairman Samuel Di Piazza said in an interview with CNBC.
Paramount did not immediately respond to a Reuters request for comment while Netflix welcomed the move.
"The Warner Bros Discovery Board reinforced that Netflix's merger agreement is superior and that our acquisition is in the best interest of stockholders," its co-CEO Ted Sarandos said in a statement.
Netflix was already engaging with the US Department of Justice and the European Commission, its other co-CEO Greg Peters told CNBC, while expressing confidence that the regulators would view the deal as pro-consumer and pro-growth.
Paramount last week took its case directly to Warner Bros shareholders, arguing it has arranged "air-tight financing" to support its bid, with $US41 billion in new equity assured by the Ellison family and RedBird Capital, and $US54 billion of debt commitments from Bank of America, Citi and Apollo.
Warner Bros board countered on Wednesday that Paramount's most recent offer includes an equity commitment "for which there is no Ellison family commitment of any kind" but rather the backing of "an unknown and opaque" Lawrence J Ellison Revocable Trust, whose assets and liabilities are not publicly disclosed and are subject to change.
"Despite having been told repeatedly by WBD how important a full and unconditional financing commitment from the Ellison family was ... the Ellison family has chosen not to backstop the PSKY offer," the Warner Bros board wrote.
"A revocable trust is no replacement for a secured commitment by a controlling shareholder."
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