After deliberating and reviewing Paramount’s bid, Warner Bros.’ board will urge shareholders to reject the tender offer, said the people, who asked not to be identified discussing confidential information. The board still views the company’s existing agreement with streaming leader Netflix Inc. as offering greater value, certainty and terms than what Paramount has proposed, they said.

Warner Bros.’ response to Paramount’s tender offer could be filed as early as Wednesday, the people added. No final decision has been made and the situation remains fluid, they said. Representatives for Warner Bros. and Paramount declined to comment.

One major sticking point is Warner Bros.’ concern about the financing proposed by Paramount, which is led by David Ellison.

The equity is backstopped by a trust that manages the wealth of his father, software billionaire Larry Ellison. Because it’s a revocable trust, assets can be taken out of it at any time, and Warner Bros. may have no recourse if that happens, the people said. 

One of Paramount’s backers dropped out the deal Tuesday. Affinity Partners, led by President Donald Trump’s son-in-law Jared Kushner, told Bloomberg News it was withdrawing from the proposed transaction, citing the involvement of “two strong competitors.”

Earlier Tuesday, President Trump criticized Paramount, saying on social media that he’s been treated “far worse” by the company’s CBS division since the Ellison family took control earlier this year. The Ellisons have touted their friendly ties to the president.

Warner Bros.’ board is also concerned about the company’s ability to conduct business for the year or more it could take for a sale to win regulatory approval. Paramount isn’t offering the company enough flexibility to run its business or manage its balance sheet, the people said. 

Paramount said in a filing last week that it had addressed Warner Bros. concerns about the company’s flexibility in refinancing debt as well as payment of a $5 billion break up fee that would be backstopped by the Ellison family. 

Paramount has adjusted terms of its bid in response to Warner Bros.’ requests in other ways. Some $1 billion in financing from China’s Tencent Holdings Ltd. was withdrawn over concerns the funding could cause national security concerns with US regulators. 

Warner Bros. agreed this month to sell its studios, streaming business and HBO to Netflix for $27.75 a share, or about $83 billion including debt, capping off a multiweek bidding war between Netflix, Paramount and Comcast Corp. Warner Bros. separately plans to spin off cable networks like CNN and TNT to its shareholders before the Netflix deal closes.

Paramount, which owns MTV and the Paramount+ streaming service, has offered to buy all of Warner Bros. for $30 a share, or more than $108 billion, including debt. Three days after Netflix and Warner Bros. announced their deal, Paramount took its offer directly to shareholders by launching a public tender offer for Warner Bros. shares. 

Paramount has said that its $30-a-share offer for Warner Bros. isn’t its “best and final,” implying it has room to raise its bid. Shares of Warner Bros. closed at $28.90 in New York, suggesting some investors expect the company to fetch a higher price. 

Warner Bros.’ agreement with Netflix bars it from soliciting proposals from other bidders but it’s allowed to entertain proposals that come in. In the event of a superior proposal, it’s required to give Netflix the opportunity to match the better offer to try to keep their existing deal intact, according to their agreement.