Paramount Skydance’s hostile takeover effort of Warner Bros. Discovery has taken a new legal turn.
David Ellison‘s Paramount Skydance on Monday sued Warner Bros. Discovery, seeking to force WBD to disclose financial details of its $83 billion deal with Netflix. Paramount also officially announced plans to launch a proxy fight for WBD: The company said it will 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 litigation comes after the board of Warner Bros. Discovery rejected Paramount’s latest $30/share all-cash bid for WBD in its entirety — the eighth offer put forward by Ellison with backers including his wealthy father, Larry Ellison.
“WBD has failed to include any 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 chairman and CEO David Ellison wrote in an open letter to WBD shareholders Monday.
Paramount on Monday filed suit in Delaware Chancery Court to ask the court “to simply direct WBD to provide this information so that WBD shareholders have what they need to be able to make an informed decision as to whether to tender their shares into our offer,” Ellison wrote.
Asked for comment, Warner Bros. Discovery said Paramount’s lawsuit was “meritless” and pointed out that Paramount “has yet to raise the price” of its acquisition offer above $30/share.
Paramount Skydance’s complaint names WBD CEO David Zaslav and the other members of WBD’s board as defendants, alleging they “breach[ed] their disclosure duties by failing to provide full, accurate, and truthful information.” A copy of the suit is available at this link.
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“While the Board’s conduct to date raises serious concerns and gives rise to various categories of fiduciary duty claims, Paramount brings this limited action now, seeking only disclosure of targeted material information, while reserving the right to seek further relief as appropriate,” Paramount Skydance’s lawsuit says. “It does so because right now, WBD’s stockholders have an immediate need for the material information being withheld in order to make a decision on Paramount’s tender offer to them.”
Meanwhile, ahead of Warner Bros. Discovery’s 2026 shareholder meeting, in addition to nominating its own candidates for the WBD board of directors, Paramount will 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,” according to David Ellison’s open letter.
According to Paramount’s analysis, the total value of the Netflix transaction to WBD shareholders currently implies that shares in the proposed Discovery Global spin-off are worthless under the Netflix deal. Under Netflix’s agreement with WBD, the streaming giant would pay $27.75/share for Warner Bros.’s films and TV studios businesses, HBO and HBO Max, and games division. That transaction would be completed after WBD’s spin-off in the third quarter of 2026 of Discovery Global, which is set to include CNN, TBS, HGTV, Food Network and Discovery+.
“We do not undertake any of these actions lightly,” Ellison wrote in the letter to WBD shareholders. “Make no mistake, our goal remains to have constructive discussions with WBD’s Board to reach an agreement that is in the best interests of WBD shareholders. … We remain perplexed that WBD never responded to our December 4th offer, never attempted to clarify or negotiate any of the terms in that proposal, nor traded markups of contracts with us.”
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,” Ellison wrote.
From Variety US