Paramount sues Warner Bros. Discovery over Netflix offer disclosure

• Paramount says it will seek a bylaw change requiring shareholder approval for any separation of WBD’s cable TV business.
• The company argues its $30 per-share all-cash bid is superior to Netflix’s $27.75 cash-and-stock offer and faces fewer regulatory hurdles.
• Paramount has filed its case in Delaware, seeking access to the financial analysis underpinning WBD’s support for the Netflix deal.

Paramount has filed a lawsuit against Warner Bros. Discovery seeking to force the disclosure of the terms of a competing offer from Netflix.

As reported by Reuters, the news comes just days after WBD's board of directors once again rejected Paramount's amended tender offer to acquire the company. 

In a letter to shareholders, Paramount said it plans to seek a bylaw amendment requiring shareholder approval for any separation of Warner Bros. Discovery’s cable TV business, a move central to Netflix’s proposed deal. 

The company argues its all-cash offer of $30 per share for the entire business is superior to Netflix’s $27.75 per share cash-and-stock bid for the studios and streaming assets and would face fewer regulatory hurdles. 

Paramount has also filed suit in the Delaware Court of Chancery to compel disclosure of the financial analysis behind the Warner Bros. Discovery board’s support for the Netflix merger.

Open to dialogue 

The company said the actions were not taken lightly and were intended to encourage constructive discussions with Warner Bros. Discovery’s board to reach an agreement.

In the letter, Paramount CEO David Ellison said the preferred outcome would be for Warner Bros. Discovery’s board to engage with Paramount under the terms of the Netflix agreement.

“We have demonstrated our willingness to listen carefully to any feedback we receive from WBD's Board and to respond by offering reasonable solutions - and that remains our mindset and approach," said Ellison. 

Netflix announced plans last month to acquire Warner Bros. Discovery, including its games division, for $82.7 billion. 

Shortly after, Paramount Skydance launched a hostile takeover bid for the company, which was quickly rejected by the Warner Bros. Discovery board. The board has since also rejected an amended version of that bid.