Paramount Skydance is suing Warner Bros. Discovery and CEO David Zaslav as its latest step in a hostile pursuit to acquire WBD, CEO David Ellison outlined in a letter to WBD shareholders on Monday.
The lawsuit asks a Delaware court to direct Warner Bros. Discovery to provide information about its sale process and pending deal with Netflix.
“WBD has failed to include any 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,” Ellison said in the letter on Monday.
“We filed suit this morning in Delaware Chancery Court to ask the court to simply direct WBD to provide this information so that WBD shareholders have what they need to be able to make an informed decision as to whether to tender their shares into our offer,” Ellison said.
Ellison also informed WBD shareholders on Monday that Paramount intends to nominate directors for election to WBD’s board at the company’s 2026 annual meeting, in a move that would add a proxy fight to the equation.
Paramount’s latest escalation comes days after WBD’s board once again recommended that shareholders reject Paramount’s amended offer, which was made in late December. The company has repeatedly said its offer is superior to the company’s deal with Netflix and has previously argued that the sale process was unfairly skewed.
“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,” Warner Bros. Discovery said in a statement on Monday.
“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.”
Warner Bros. Discovery last month agreed to sell its streaming and studio business to Netflix for $72 billion. The proposed deal was the result of a sale process in which Paramount was bidding for all of WBD’s assets, including its portfolio of cable TV channels, known as Discovery Global.
As part of the Netflix deal, Warner Bros. Discovery plans to separate Discovery Global into its own publicly traded entity.
Soon after WBD reached a deal with Netflix, Paramount went public with its hostile bid. Paramount has offered $30 per share, all cash for all of Warner Bros. Discovery’s assets.
WBD’s board told shareholders in December to reject the initial offer in favor of the Netflix deal, citing concerns about the backing of Ellison’s father, billionaire Larry Ellison. Paramount responded with an amended offer in which the Oracle co-founder agreed not to revoke the family trust or adversely transfer its assets during a pending transaction.
Paramount has stopped short of increasing the size of its bid, however.
The newly merged Paramount Skydance first took interest in Warner Bros. Discovery in the fall, making three unsolicited offers that were each rejected. Warner Bros. Discovery then opened up a sale process seeking offers for some or all of its company.
At the same time, Warner Bros. Discovery said it would carry on with a plan that was announced earlier in the year to split its company into two publicly traded entities — Warner Bros., consisting of the streaming platform HBO Max and film studio, and Discovery Global, comprised of the pay TV networks like TNT and CNN.
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