Paramount Skydance has taken a dramatic new step in its hostile takeover attempt of Warner Bros. Discovery (WBD) by filing a lawsuit and announcing plans to nominate directors to WBD’s board in an effort to influence key shareholder decisions. The legal and corporate maneuvering marks a significant escalation in a high-stakes bidding war over one of Hollywood’s most valuable media companies.
Paramount, led by CEO David Ellison, said on Monday it has filed suit in the Delaware Court of Chancery against Warner Bros. Discovery, seeking disclosure of detailed financial information about WBD’s proposed $82.7 billion merger with Netflix. The lawsuit aims to compel WBD to reveal how it evaluated the competing offers so shareholders can make an informed decision about where to tender their shares.
In a related move, Paramount disclosed plans to nominate its own slate of directors for election to the WBD board at the upcoming annual meeting. This proxy battle is intended to give Paramount greater influence over corporate governance and the strategic direction of the company, particularly regarding approval of future transactions.
Paramount insists its all-cash offer of $30 per share, backed in part by a personal guarantee of $40 billion in equity from Oracle co-founder Larry Ellison, is financially superior to Netflix’s mixed cash-and-stock proposal of $27.75 per share. Paramount argues the Netflix deal neglects important aspects of WBD’s global networks business and undervalues key assets, including cable channels such as CNN and Cartoon Network.
Warner Bros. Discovery’s board has repeatedly rebuffed Paramount’s overtures, endorsing the Netflix transaction and urging shareholders to back that deal instead. Paramount’s suit alleges WBD has not adequately justified its evaluation criteria or the relative merits of the offers, and that shareholders are being deprived of essential information.
The escalating conflict has already affected market sentiment, with Warner Bros. Discovery’s stock sliding amid heightened uncertainty. Netflix and Paramount’s shares, by contrast, have seen modest gains as investors weigh the potential outcomes of this complex legal and financial battle.
As the January 21 expiration date for Paramount’s tender offer nears, the company may seek extensions while pressing its proxy fight and lawsuit. With both legal and shareholder strategies now in play, the outcome of this corporate showdown is likely to shape the future of one of the entertainment industry’s most iconic brands.