Paramount Skydance Corporation has intensified its pursuit of Warner Bros. Discovery, Inc. (WBD), launching legal action and preparing a proxy contest after WBD’s board declined to engage with Paramount’s $30-per-share all-cash takeover proposal.
In a letter to WBD shareholders, Paramount Chairman and Chief Executive Officer David Ellison said the company would proceed with its tender offer and seek to place the ultimate decision in the hands of investors. Paramount argues that its fully financed cash bid is superior to WBD’s agreed transaction with Netflix, which involves a mix of cash, Netflix shares, and equity in a planned Global Networks spin-off.
Paramount has filed a lawsuit in the Delaware Court of Chancery seeking to compel WBD to disclose the financial analyses underpinning its board’s recommendation in favor of the Netflix deal. According to Paramount, WBD has failed to explain how it valued the Global Networks spin-off, how debt transfers affect shareholder consideration, or how it assessed the overall value of the Netflix transaction. Paramount contends that such disclosures are required under Delaware law to allow shareholders to make an informed decision, particularly ahead of the January 21 expiry of its tender offer.
In parallel, Paramount plans to nominate a slate of directors at WBD’s next shareholder meeting who would seek to exercise WBD’s right under the Netflix merger agreement to engage with Paramount. The company also intends to propose a bylaw amendment requiring shareholder approval for any separation of WBD’s cable television business, a key element of the Netflix deal.
WBD has rejected multiple Paramount offers and has advised shareholders to support the Netflix transaction. The company has dismissed the lawsuit as meritless, arguing that Paramount has neither raised its bid nor addressed deficiencies in its proposal.
The dispute sets the stage for a shareholder-driven outcome in one of Hollywood’s most consequential takeover battles.