Paramount Skydance Corp., led by David Ellison, has escalated its months-long effort to acquire Warner Bros. Discovery Inc. (WBD), filing a lawsuit over the studio’s $82.7 billion merger agreement with Netflix Inc. The move intensifies one of Hollywood’s most high-profile corporate battles.
Paramount sued Warner Bros in the Delaware Court of Chancery, seeking disclosure of the financial analysis that the Warner Bros. board used to justify its Netflix deal.
The lawsuit aims to give shareholders critical information needed to weigh Paramount’s $108.7 billion all-cash bid before the tender offer expires on January 21.
Paramount also plans to nominate directors to Warner Bros’ board to challenge the Netflix merger and influence shareholder decisions.
The company proposed an amendment to Warner Bros’ bylaws requiring shareholder approval for any spinoff of the cable TV business—a key component of the Netflix deal.
Competing offers
Paramount’s offer: $30 per share, all-cash, totaling $108.7 billion, backed in part by $40 billion equity guaranteed by Larry Ellison and $54 billion in debt.
Netflix’s offer: $27.75 per share in a mix of cash and stock, valued at $82.7 billion.
Paramount argues its all-cash bid is easier to value, financially superior, and more likely to clear regulatory scrutiny.
Warner Bros maintains the Netflix deal offers strategic value, particularly through the potential Discovery cable TV spinoff, which Paramount claims has little worth.
Board reactions
Warner Bros’ board rejected Paramount’s latest offer, calling Paramount’s arguments “meritless” and noting that the company has not raised its bid or addressed deficiencies.
Warner Bros also warned that walking away from Netflix would trigger a $2.8 billion termination fee, part of $4.7 billion in additional costs.
Implications for shareholders and industry
Paramount claims that Warner Bros has never argued that the Netflix deal is financially superior, and the dispute could come down to a shareholder vote.
The outcome will influence control of Warner Bros’ prized content library, including Harry Potter, DC Comics, and HBO assets, reshaping Hollywood content and streaming power dynamics.
5 key takeaways from Paramount vs Warner Bros – Netflix showdown:
Paramount files lawsuit against Warner Bros over Netflix $82.7B deal – Seeks full financial disclosure to aid shareholder decision-making.
Paramount claims $108.7B all-cash offer superior to Netflix cash-and-stock deal – Argues it’s easier to value and more likely to pass regulatory scrutiny.
Paramount plans Board nominations to challenge Netflix merger – Move aimed at influencing Warner Bros shareholder vote.
Bylaw amendment proposed to require shareholder approval – Paramount contests Netflix deal’s Discovery TV spin-off valuation.
Shareholders face January 21 deadline to decide – Vote could determine control of Warner Bros’ major content assets, including Harry Potter, DC Comics, and HBO.