Paramount has escalated its fight to take control of Warner Bros Discovery by filing a lawsuit in Delaware and preparing a proxy contest against the media company’s board. The legal move seeks access to internal financial analyses behind Warner Bros’ agreement with Netflix, information Paramount says investors need before a key tender deadline later this month.
The lawsuit, filed Monday in the Delaware Court of Chancery, targets Warner Bros Discovery and asks the court to compel disclosure of materials that led the board to back a rival deal with Netflix. Paramount said the information is essential for shareholders deciding whether to tender shares into its offer before January 21, when the bid is set to expire unless extended.
Paramount, led by David Ellison, also said it plans to nominate directors to Warner Bros’ board. The step marks one of its most aggressive tactics so far in a takeover battle that has already drawn repeated rejections from the target company.
Lawsuit aims to influence shareholders ahead of tender deadline
Paramount argues that its all-cash proposal offers greater certainty and value than Netflix’s cash-and-stock transaction. According to the company, its bid values Warner Bros at about $30 per share, compared with roughly $27.75 per share implied by the Netflix deal for the studio and streaming assets. Paramount also contends that its structure would face fewer regulatory hurdles.
In communications to investors, Paramount said it would seek a change to Warner Bros’ bylaws that would require a shareholder vote on any separation of the company’s cable television business. That issue sits at the center of the Netflix transaction, which includes a planned spinoff of cable assets. Paramount has argued that those assets hold little value and that investors should have a direct say before any breakup proceeds.
Warner Bros’ board has rejected multiple offers from Paramount and advised shareholders to support the Netflix agreement. The company has also said it would owe Netflix a $2.8 billion termination fee if it walked away from the deal, part of what it estimates could reach $4.7 billion in total exit costs.
Market observers remain skeptical that litigation alone will shift the outcome. Some analysts say the decisive factor will be price rather than process. Warner Bros responded to the lawsuit by calling it meritless and saying Paramount has yet to address what it described as fundamental flaws in its offer.
Still, the court action raises the stakes as the tender deadline approaches. Paramount said timing matters because any decision to extend its offer will depend, at least in part, on how many shares investors tender. If the dispute moves toward a proxy vote, shareholders could soon find themselves choosing not only between two bids, but also between competing visions for the future of one of Hollywood’s most valuable content libraries.
