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In a major escalation, David Ellison’s Paramount said it intends to nominate directors for election at the Warner Bros. Discovery 2026 annual meeting to solicit against the approval of the Netflix transaction. It also filed suit in Delaware Chancery Court seeking disclosure of “basic information to enable WBD shareholders to make informed decision” of whether or not to tender their shares.
An advance notice window for WBD’s 2026 annual meeting opens in three weeks, Paramount said, and it plans to nominate a slate of directors “who, in accordance with their fiduciary duties, will exercise WBD’s right under the Netflix Agreement to engage on Paramount’s offer and enter into a transaction with Paramount,” the company said in a letter to WBD shareholders outlining next steps after Warner’s board rejected its all-cash offer of $30 per share multiple times in favor of a deal with the giant streamer.
Paramount will also propose an amendment to WBD’s bylaws to require WBD shareholder approval for any separation of Global Networks. “If WBD calls a special meeting ahead of its annual meeting to vote on the Netflix Agreement, Paramount will solicit proxies against such approval.”
As for the lawsuit, Par said, it was filed this morning in Delaware Chancery Court “to ask the court to simply direct WBD to provide 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.” Paramount is offering to buy all of WBD.
WBD shareholders requirre the information “to make an informed decision as to whether to tender their shares.” The tender offer was extended once and now expires on January 21.
Paramount has been chasing WBD since shortly after the Skydance merger last summer and made a trio of offers before Warner opened up the process to other bidders, ultimately sealing a transation with Netflix. The streamer’s deal is for $27.75 in cash and some Netflix stock for WBD’s studio and streaming assets. WBD is planning to spin off the linear television business, Discovery Global, into a separate public company by the third quarter before the Netflix deal closes.
Both deals require regulatory approval and are likely to take 12-18 month to close.
WBD has advised shareholders twice in past weeks not to tender their shares insisting a Paramount agreement carries more uncertainties. However, it does not dispute either the economics or the regulatory prospects of one deal over the other. Put simply. WBD takes issue with what it sees as financing complexity, lack of transparency and the number of parties involved in a Paramount transaction, which would be a much smaller company taking over much larger one.
Larry Ellison, one of the world’s richest men, has personally agreed to backstop the equity in Par’s latest offer to address WBD’s concerns.
WBD does claim there are restrictions on financing while a Par deal is pending (which Paramount has denied) that could be injurious. And it would have to stop work on the Discovery Global spinoff, which, it says, would put it in a worse position down the road if the Paramount transaction fails to close than if the Netflix deal falls apart.
Neither is a shoe-in. President Donald Trump, who has said he will be involved in the decision, is a friend of Larry Ellison’s but has also said he’s a fan of Netflix co-CEO Ted Sarandos. He’s appeared to waffle, including in a social media post last night.
More to come
English (US) ·