Warner's leadership has repeatedly rebuffed Skydance-owned Paramount's overtures - and urged shareholders just weeks ago to back its the sale of its streaming and studio business to Netflix for $US72 billion ($A106 billion).
Paramount, meanwhile, has made efforts to sweeten its $US77.9 billion hostile offer for the entire company.
Warner Bros Discovery said on Wednesday that its board determined Paramount's offer is not in the best interests of the company or its shareholders.
It again recommended shareholders support the Netflix deal.
"Paramount's offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed," Warner Bros. Discovery chair Samuel Di Piazza Jr said in a statement.
In contrast, he added, the company's agreement with Netflix "will offer superior value at greater levels of certainty".
Paramount did not immediately respond to a request for comment.
The company's hostile bid is still on the table.
Warner shareholders currently have until January 21 to "tender" their shares.
Late last month, Paramount announced an "irrevocable personal guarantee" from Oracle founder Larry Ellison - who is the father of Paramount CEO David Ellison - to back $US40.4 billion in equity financing for the company's offer.
Paramount also increased its promised payout to shareholders to $US5.8 billion if the deal is blocked by regulators, matching Netflix's breakup fee.
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