Paramount is escalating their war with Warner Bros. Discovery and Netflix to the legal sphere, filing a lawsuit releated to the WBD-Netflix acquisition deal. Deadline reports that Paramount Skydance filed the lawsuit in Delaware Chancery Court on Monday. The lawsuit seeks to compel WBD to reveal information about how it values Netflix’s deal to acquire the company. The lawsuit is asking the Court to compel disclosure of “basic information to enable WBD shareholders to make informed decision” regarding whether to tender their shares in Paramount’s hostile takeover bid.
As previously reported, Paramount launched a hostile takeover bid in early December. The bid came after Netflix and WBD announced a deal a few days earlier for Netflix to acquire the other company.
Warner Bros. Discovery has rejected Paramount’s hostile bid attempt, and rejected an updated offer last week. Paramount’s updated bid kept their price at $30 per share while adding a personal agreement from Larry Ellison to backstop the equity in the offer.
Paramount sent a letter to WBD shareholders on Monday informing them of the lawsuit. The company said that it plans to nominate a its own set of directors for WBD’s board “who, in accordance with their fiduciary duties, will exercise WBD’s right under the Netflix Agreement to engage on Paramount’s offer and enter into a transaction with Paramount.” They will also propose an amendment to Warner Bros. Discovery’s bylaws to require shareholder approval for any separation of the Discovery Global networks. WBD is set to spin off their networks into a new company, while Paramount’s offer is for the full company including the networks.
WBD said in a statement on Monday:
“Despite six weeks and just as many press releases from Paramount Skydance, it has yet to raise the price or address the numerous and obvious deficiencies of its offer. Instead, Paramount Skydance is seeking to distract with a meritless lawsuit and attacks on a board that has delivered an unprecedented amount of shareholder value. In spite of its multiple opportunities, Paramount Skydance continues to propose a transaction that our board unanimously concluded is not superior to the merger agreement with Netflix.”
Paramount’s offer is for $30 a share, while Netflix’s deal equates to $27.75 in cash and some Netflix stock. WBD argues, among other things, that the difference in price is made up by the spinoff of Discovery Global. They also cite a number of risks in the Paramount deal that are not present in the Netflix deal.
For wrestling fans, AEW is of course a factor here. AEW airs on TBS and TNT, plus HBO Max. TBS and TNT would go to Discovery Global in the Netflix deal while HBO Max would be owned by Netflix.
Whatever the case, AEW’s situation will not be changing for some time. Their deal with WBD won’t affected at least until Discovery Global is spun off in the back half of 2026. The wrestling company’s contract with WBD runs through 2027, with an option on WBD’s part to extend to 2028 if desired.
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