*Warner Bros. Discovery faces mounting pressure from Paramount as the media giant escalates its campaign to prevent a massive Netflix acquisition. David Ellison’s company filed suit in Delaware Chancery Court on Monday, demanding greater financial transparency regarding the streaming platform’s planned purchase of WBD, per THR.
The legal action accompanies Paramount’s announcement that it will nominate its own director slate for WBD’s board and propose bylaw amendments requiring shareholder approval for asset separations. Ellison outlined the multipronged strategy in a letter to WBD shareholders, maintaining his company’s $30-per-share all-cash hostile tender offer remains superior to Netflix’s deal.
Warner Bros. Discovery previously rejected Paramount’s $108 billion bid, choosing instead to proceed with the $82.7 billion Netflix transaction announced in December. The Netflix agreement would transfer WBD’s television and film studios, HBO, and HBO Max to the streaming service for $23.25 in cash plus Netflix stock currently valued at $4.11 per share and equity in a separated Global Networks division.
Paramount’s lawsuit seeks to compel WBD to disclose how it assessed the Global Networks equity value, calculated the overall Netflix transaction worth, and determined its “risk adjustment” of Paramount’s cash offer. Ellison argues shareholders require this information to make informed decisions, citing Delaware legal precedents mandating such disclosure.
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The Netflix deal would deliver valuable intellectual property, including DC Comics characters Batman and Superman, “Game of Thrones,” and franchises spanning “Harry Potter” to “Dune” and “Barbie” to the streaming platform. Cable networks like CNN and TNT would operate separately under the proposed structure.
Ellison’s shareholder letter emphasized his company’s willingness to negotiate while criticizing WBD’s board for never responding to Paramount’s December 4th proposal or attempting to clarify terms. “We remain perplexed that WBD never responded to our December 4th offer, never attempted to clarify or negotiate any of the terms in that proposal, nor traded markups of contracts with us,” the letter stated.
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