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 to reject Paramount’s hostile bid, concluding it was not in the best interests of 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 valued at $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.

Netflix touted its winning cash and stock bid in a separate letter to Warner shareholders.

“Our deal structure is clean and certain, with committed debt financing from leading institutions,” Netflix Co-Chief Executives Ted Sarandos and Greg Peters wrote. “There are no contingencies, no foreign sovereign wealth funds, and no stock collateral or personal loans. We are a scaled company with a +$400 billion market cap and a strong investment grade balance sheet.”

Paramount Chief Executive David Ellison has argued his $108-billion deal is superior to Netflix’s proposal.

(Evan Agostini / Evan Agostini/invision/ap)

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.

David 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, “The Wizard of Oz,” “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 group.

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 such a 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, including its cable channels, 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, 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.

“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.

“We are highly confident that regulators will see this deal for what it is: pro-consumer, pro-innovation, pro-worker, pro-creator, pro-growth, and pro-competition,” Netflix’s Sarandos and Peters wrote.

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.

The companies anticipate that it will take a year to 18 months to secure the blessing of regulators around the world.

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.