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paramount skydance Legal action underway against Warner Bros. Discovery Channel After the latter rejected a hostile takeover bid for the company Support for continuing to use Netflix.
In a lawsuit filed in Delaware Chancery Court, Paramount Skydance wants Warner Bros. to provide information about its sales process and Billion-dollar deal with rival Netflix pending.
“WBD has not disclosed anything about how it valued the Global Networks stub equity, how it valued the Netflix deal as a whole, how the debt purchase price reduction worked in the Netflix deal, or even the basis for a ‘risk adjustment’ for our $30 per share all-cash acquisition offer,” Paramount Skydance CEO David Ellison said in a companywide letter on Monday.
“We filed a lawsuit this morning in the Delaware Chancery Court asking the court to simply direct WBD to provide this information so that WBD shareholders have the information they need to make an informed decision about whether to include their shares in our offer.”
The lawsuit comes just days after WBD advised its shareholders to once again reject Paramount Skydance’s revised offer and Instead, support competitive offers from Netflix.
Last month, WBD agreed to sell its studio and streaming operations to Netflix closed a lucrative $82.7 billion deal. The shocking deal comes after Paramount Skydance initially offered to acquire the entire company, which includes prominent networks like CNN and Discovery, rather than just the studio and streaming divisions.
Within days of WBD’s deal with Netflix, Paramount Skydance made a public $77 billion hostile takeover bid. Although the company later raised its all-cash offer to $30 per shareWBD then continued to urge its shareholders to stand firm and accept Netflix’s competing offer.
Ellison’s letter continued: “WBD offered increasingly novel reasons for avoiding the Paramount deal, but it never said that because it could not say that the Netflix deal was financially superior to our actual offer.”
“We are surprised that the board held virtually no actual meeting before deciding to accept a shoddy deal with Netflix. And we are surprised by WBD’s lack of transparency on fundamental financial matters. This is simply illogical, as is WBD’s continued predisposition to accept our calculations for an all-cash offer of less than $30 per share to its shareholders,” he added.
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“The best outcome for you and for us is for the WBD board to exercise its rights under the Netflix agreement to work with Paramount. If it does, we will be open and constructive to ensure the best path forward for WBD and each of you.”
