Paramount files lawsuit against Warner Bros over $82.7B Netflix deal – Latest updates & key developments
Paramount Skydance Corp., led by David Ellison, Warner Bros. It has stepped up its months-long effort to acquire Discovery Inc. (WBD) and acquired the studio’s Netflix Inc. filed a lawsuit over the $82.7 billion merger agreement with. The move intensifies one of Hollywood’s most high-profile corporate battles.
Paramount, Warner Bros. sued Warner Bros. in the Delaware Court of Chancery, demanding disclosure of the financial analysis the board of directors used to justify the Netflix deal.
The lawsuit aims to give shareholders critical information needed to weigh Paramount’s $108.7 billion cash offer before the tender offer expires on Jan. 21.
Paramount also plans to appoint directors to Warner Bros’ board of directors to challenge the Netflix merger and influence shareholder decisions.
The company has proposed an amendment to Warner Bros.’ charter that would require shareholder approval for any spinoff of its cable TV business, a key component of the Netflix deal.
Competing offers
Paramount’s offer: $30 per share, all cash, $108.7 billion total, backed by $40 billion in equity and $54 billion in debt partially guaranteed by Larry Ellison.
Netflix’s offer: $27.75 per share in a mix of cash and stock, valuing it at $82.7 billion.
Paramount argues that its all-cash offer is easier to evaluate, financially superior and more likely to pass regulatory scrutiny.
Warner Bros. argues the Netflix deal offers strategic value, particularly through the potential Discovery cable TV spinoff, which Paramount argues has little value.
Board reactions
Warner Bros.’ board of directors rejected Paramount’s latest offer, calling Paramount’s claims “unfair” and stating that the company did not raise its offer or address the deficiencies.
Warner Bros. also warned that leaving Netflix would trigger a $2.8 billion termination fee, part of $4.7 billion in additional costs.
Implications for shareholders and the industry
Paramount claims that Warner Bros. never claimed the Netflix deal was financially superior and that the dispute could go as far as a shareholder vote.
The outcome will impact control of Warner Bros.’ library of award-winning content, including its Harry Potter, DC Comics and HBO properties, reshape Hollywood content and impact broadcast power dynamics.
5 important takeaways from Paramount vs Warner Bros – Netflix match:
Paramount sues Warner Bros over Netflix’s $82.7 billion deal – Wants full financial disclosure to help shareholders make decisions.
Paramount claims the $108.7 billion all-cash offer is superior to Netflix’s cash-and-stock deal — arguing it’s easier to value and more likely to pass regulatory scrutiny.
Paramount plans to nominate candidates to the Board of Directors to challenge Netflix merger – Move aimed at influencing Warner Bros shareholder votes.
Charter change proposed to require shareholder approval – Paramount objects to Discovery TV spinoff consideration of Netflix deal.
Shareholders face a Jan. 21 deadline to decide: The vote could determine control of Warner Bros.’ major content assets like Harry Potter, DC Comics and HBO.
