UPDATED with WBD response: Hit with a legal filing and an upcoming proxy fight, Warner Bros. Discovery called Paramount‘s proposed transaction “not superior to Netflix” and slammed the David Ellison company for failing to raise its offer.
“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,” WBD said in a statement today. “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.”
The comments came after Paramount earlier today filed suit in Delaware Chancery Court seeking disclosure of “basic information to enable WBD shareholders to make informed decision” of whether or not to tender their shares. It also said it intends to nominate directors for election at the Warner Bros. Discovery 2026 annual meeting, setting up a proxy fight to derail the Netflix transaction.
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PREVIOUSLY: An advance notice window for WBD’s 2026 annual meeting opens in three weeks, Paramount said earlier today, and it plans to nominate a slate of directors “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,” the company said in a letter to WBD shareholders outlining next steps after Warner’s board rejected its all-cash offer of $30 per share multiple times in favor of a deal with the giant streamer.
Paramount will also propose an amendment to WBD’s bylaws to require WBD shareholder approval for any separation of Global Networks. “If WBD calls a special meeting ahead of its annual meeting to vote on the Netflix Agreement, Paramount will solicit proxies against such approval.”
As for the lawsuit, Par said, it was filed this morning in Delaware “to ask the court to simply direct WBD to provide disclosure about how it valued the Global Networks stub equity, how it valued the overall Netflix transaction, how the purchase price reduction for debt works in the Netflix transaction, or even what the basis is for its “risk adjustment” of our $30 per share all-cash offer.”
Paramount is offering to buy all of WBD. WBD shareholders require the information “to make an informed decision as to whether to tender their shares.” The tender offer was extended once and now expires on January 21.
Paramount has been chasing WBD pretty much since closing the Skydance merger last summer and made a trio of offers before Warner opened up the process to other bidders, ultimately inking a transaction with Netflix. The streamer’s deal is for $27.75 in cash and some Netflix stock to buy WBD’s studio and streaming assets. WBD’s linear television business, Discovery Global, will be spun off into a separate public company in the third quarter, before the Netflix deal closes.
Netflix and Paramount deals both require regulatory approval and could take 12-18 month to close.
WBD has advised shareholders twice in past weeks not to tender their shares to Paramount, insisted an agreement carries risks and uncertainties. It does not dispute the economics or regulatory prospects of one deal over the other. It cites a number of issues, however, including complexity and lack of transparency in the Paramount offer, which would see a much smaller company acquiring a much larger one.
Paramount says it’s addressed every WBD concern. Larry Ellison, one of the world’s richest men, personally agreed to backstop the equity in Par’s latest offer to address WBD’s concerns. Most recently, on Jan. 8 Paramount reaffirmed its $30 a share offer.
WBD cites restrictions on its financing while a Par deal is pending (which Paramount has denied) that could be injurious. It would be required to stop work on the Discovery Global spinoff. That, it says, would put it in a worse position down the road if the Paramount transaction fails to close than if the Netflix deal falls apart.
Because neither is a shoo-in. President Donald Trump, who has said he will be involved in the decision, is a friend of Larry Ellison. But has also said he’s a fan of Netflix co-CEO Ted Sarandos. He waffles, including in a social media post last night.
Seeking recourse to deal-related documents in Delaware Chancery Court isn’t uncommon. A group of Paramount shareholders, for instance, last year sued for similar access to determine how Shari Redstone’s payout was calculated compared with that ti other stockholders in Par’s sale to Skydance. At least one case is still playing out.
Proxy fights can be bitter, disruptive and quite costly for both sides. In 2024, Disney beat down a proxy challenge by billionaire activist investor Nelson Peltz, whose Trian Partners ran two candidate for election to the Disney board — himself and former Mouse executive Jay Rasulo, to shake things up. Neither was elected.
A proxy is the official notice to shareholders of proposals that will be voted on at the annual meeting. Filed annually with the SEC, the proxy include the election of directors, executive compensation and changes to the company’s bylaws. It can include proposals from dissident shareholders to change the company’s governance structure.