As previously reported, Paramount launched a hostile takeover bid in early December of last year after Netflix and Warner Bros. Discovery announced a deal just days earlier for Netflix to acquire the network company. Warner Bros. Discovery (WBD) rejected Paramount’s hostile bid attempt and also turned down an updated offer last week. Paramount’s updated bid maintained the price at $30 per share while including a personal agreement from Larry Ellison to support the equity in the offer.
According to Deadline.com, Paramount Skydance filed a lawsuit in Delaware Chancery Court on Monday regarding the WBD-Netflix acquisition deal. The lawsuit seeks to compel WBD to disclose information on how it values Netflix’s deal to acquire the company compared to Paramount's offer. It also requests that the court force the disclosure of basic information to help WBD shareholders make informed decisions about whether to tender their shares in Paramount’s hostile takeover bid.
Additionally, the report noted that Paramount sent a letter to WBD shareholders on Monday informing them of the lawsuit. The company stated that it plans to nominate its own set of directors for WBD’s board who, in accordance with their fiduciary duties, will pursue WBD’s right under the Netflix Agreement to consider Paramount’s offer and potentially enter into a transaction with Paramount. They will also propose an amendment to WBD's bylaws that would require shareholder approval for any separation of the Discovery Global networks. WBD is set to spin off its networks into a new company, while Paramount's offer includes the full company, including the networks.
Paramount’s offer is priced at $30 per share, while Netflix’s deal equates to $27.75 in cash along with some Netflix stock. WBD argues that the difference in price is offset by the spinoff of Discovery Global. They also cite several risks in the Paramount deal that are absent in the Netflix deal. For wrestling fans, All Elite Wrestling (AEW) is a significant factor, as AEW broadcasts on TBS and TNT, as well as HBO Max. TBS and TNT will transfer to Discovery Global as part of the Netflix deal, while HBO Max will be owned by Netflix.
Regardless of the situation, AEW’s scenario will remain unchanged for some time. Their deal with WBD will not be affected until at least Discovery Global is spun off in the latter half of 2026. AEW's contract with WBD runs through 2027, with an option for WBD to extend it to 2028 if desired.
