Paramount is calling foul in the Warner Bros. Discovery sale process, accusing the company of running an unfair process — one that it thinks might favors Netflix.
It has become increasingly clear, through media reporting and otherwise, that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders, and embarked on a myopic process with a predetermined outcome that favors a single bidder. We specifically request and expect this letter will be shared and discussed with the full board of directors of WBD,” the David Ellison company wrote in a letter to WBD CEO David Zaslav and others.
“Please be assured that the WBD Board attends to its fiduciary obligations with the utmost care, and that they have fully and robustly complied with them and will continue to do so,” said WBD attorneys in response. They said the letter has been shared with the full board of directors.
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Paramount’s missive cited press reports that WBD management was warming to a Netflix offer. “We have come to you first to inquire whether this reporting is accurate, and to engage in a productive discussion with you around any actual or perceived issues that it may reflect.”
The company also, without naming names, accused WBD management of conflict of interest.
“Paramount has a credible basis to believe that the sales process has been tainted by management conflicts, including certain members of management’s potential personal interests in post-transaction roles and compensation as a result of the economic incentives embedded in recent amendments to employment arrangements. These concerns are amplified by indications of director bias and beholdenness to others whose interests may not align with the stockholders’, and the fact that alternatives involving only certain WBD assets are being prioritized notwithstanding their heightened regulatory risk and potential to deprive stockholders of consideration for the entirety of WBD’s enterprise value,” reads the letter.
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