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Paramount Skydance Corporation has filed a lawsuit against Warner Bros. Discovery (WBD) in the Delaware Chancery Court, escalating its challenge to WBD's USD 82.7 billion deal with Netflix.
The legal move comes as Paramount presses ahead with its USD 30 per share all-cash offer for WBD, which it says is financially superior to the Netflix transaction. In a letter sent to WBD shareholders on Monday, Paramount shared its next steps and said it is seeking greater financial disclosure around the Netflix deal so that shareholders can make an informed decision. It said, "WBD has provided increasingly novel reasons for avoiding a transaction with Paramount, but what it has never said, because it cannot, is that the Netflix transaction is financially superior to our actual offer." Paramount claims the Netflix deal is inferior in terms of value, timing and certainty of closure. According to the company, Netflix's consideration includes USD 23.25 in cash, Netflix shares currently worth USD 4.11, and equity in a to-be-issued Global Networks business, which Paramount says it has analysed as having zero equity value. Paramount also alleged that WBD has not disclosed how the debt transfer from Global Networks could reduce the cash and stock consideration payable to shareholders. The company said WBD has failed to provide customary financial disclosures in its filings, including how it valued the Global Networks equity, how it valued the overall Netflix transaction, how the purchase price reduction for debt works, and how it applied a "risk adjustment" to Paramount's USD 30 per share offer. Paramount said Delaware law requires such disclosures when shareholders are asked to make an investment decision. As part of its strategy, Paramount said it will continue with its tender offer and may nominate a slate of directors ahead of WBD's 2026 annual meeting. These directors, if elected, would exercise WBD's right under the Netflix agreement to engage with Paramount. Paramount also plans to propose a bylaw amendment requiring shareholder approval for any separation of Global Networks. If WBD calls a special meeting to vote on the Netflix agreement, Paramount said it will solicit proxies against its approval. Paramount also expressed surprise that WBD did not respond to its December 4 offer or attempt to negotiate, and questioned the board's process leading up to accepting the Netflix deal. This development comes a month after Warner Bros. Discovery struck a deal with Netflix in December 2025, Netflix agreed to buy WBD's key assets (Warner Bros. studios, HBO/Max streaming, etc.) for about USD 83 billion (cash + stock), while WBD spins off its cable networks (like CNN) separately. Paramount Skydance (led by David Ellison, backed by his dad Larry Ellison) launched another takeover bid to buy all of WBD for USD 30/share, all-cash (around USD 108 billion), claiming it's better for shareholders. WBD's board has repeatedly rejected Paramount's offers (most recently in early Jan 2026), calling them risky (too much debt), inferior, and sticking with Netflix. The share prices of Warner Bros. Discovery and Netflix declined on Monday at the New York Stock Exchange, while Paramount Skydance closed higher. Paramount Skydance shares ended the session with a gain of 0.75 per cent at USD 12.15. Meanwhile, shares of Warner Bros. Discovery fell by 1.68 per cent to USD 28.40. Netflix shares also slipped marginally and closed in the red at USD 89.42 per share. (ANI)
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