Paramount Skydance’s hostile takeover effort for Warner Bros. Discovery has taken a new legal twist.
David Ellison’s Paramount Skydance sued Warner Bros. Discovery on Monday, demanding that WBD disclose financial details of its $83 billion deal with Netflix. Paramount also formally announced plans to begin a proxy fight for WBD. The company announced that it will name directors who will “pursuant to their fiduciary duties and exercise their WBD rights under the Netflix Agreement to respond to Paramount’s proposals and enter into transactions with Paramount.”
The lawsuit comes after Warner Bros. Discovery’s board flatly rejected Paramount’s latest all-cash bid of $30 a share for WBD, the eighth offer Mr. Ellison had made with backers including his wealthy father, Larry Ellison.
“WBD has a lot of questions about how it valued the Global Networks stub, how it valued the Netflix deal as a whole, how the debt purchase price reduction in the Netflix deal would work, and even more. “We have not included any disclosure as to what the ‘risk adjustment’ basis for the all-cash offer of $30 per share is,” Paramount Chairman and CEO David Ellison said in an open letter to WBD shareholders on Monday.
Paramount filed suit Monday in Delaware Chancery Court, asking the court to “simply direct WBD to provide this information so that WBD stockholders can make an informed decision as to whether to subscribe their shares to our offering,” Ellison wrote.
Reached for comment, Warner Bros. Discovery called Paramount’s lawsuit “without merit” and noted that Paramount “has not yet increased” the price of its offer beyond $30 per share.
Paramount Skydance’s complaint names WBD CEO David Zaslav and other WBD board members as defendants, alleging that they “breached their disclosure obligations by failing to provide complete, accurate and truthful information.” A copy of the lawsuit is available at this link.
“While the Board’s prior actions raise serious concerns and give rise to various categories of fiduciary duty claims, Paramount now files a limited action seeking only the disclosure of material covered information, while reserving the right to seek further relief as appropriate,” Paramount Skydance’s complaint states. “This is because WBD shareholders now urgently need the material information that has been withheld from them in order to make a decision regarding Paramount’s tender offer.”
Meanwhile, ahead of Warner Bros. Discovery’s 2026 shareholder meeting, in addition to nominating its own candidates to the WBD board of directors, Paramount plans to propose an amendment to the WBD charter that would require WBD stockholder approval for a “global network separation.” According to David Ellison’s open letter, if WBD convenes a special meeting to vote on the Netflix deal prior to its annual meeting, Paramount will “recruit proxies to oppose such approval.”
According to Paramount’s analysis, the total value of the Netflix deal to WBD shareholders means that their shares in the proposed Discovery Global spinoff are currently worthless under the Netflix deal. Under the Netflix and WBD deal, the streaming giant will pay $27.75 per share for Warner Bros.’ movie and TV studio business, HBO and HBO Max, and the gaming division. The transaction is expected to close after WBD spins off Discovery Global, which includes CNN, TBS, HGTV, Food Network and Discovery Plus, in the third quarter of 2026.
“We do not undertake these actions lightly,” Ellison said in a letter to WBD shareholders. “Make no mistake about it. Our goal remains to engage in constructive discussions with WBD’s board of directors and reach an agreement that is in the best interests of WBD stockholders. … We remain perplexed that WBD never responded to our December 4 proposal, made no attempt to clarify or negotiate the terms of that proposal, or trade contract markups with us.”
WBD “offers a series of novel reasons to avoid a deal with Paramount, but what it fails to do and never makes clear is that a deal with Netflix is financially superior to our actual proposal,” Ellison wrote.
