Paramount–Skydance has escalated its battle with Warner Bros. Discovery (WBD) by filing a lawsuit in the Delaware Chancery Court, intensifying its opposition to WBD’s USD 82.7 billion transaction with Netflix.
The legal challenge comes as Paramount continues to push its own competing bid — a USD 30-per-share all-cash offer for Warner Bros. Discovery — which it argues delivers greater value, certainty and transparency for shareholders than the Netflix deal.
In a letter circulated to WBD shareholders on Monday, Paramount outlined its next course of action and said it is seeking fuller financial disclosures related to the Netflix agreement, insisting that investors are being asked to make a decision without adequate information.
“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,” Paramount said in the letter.
According to Paramount, the Netflix deal falls short on multiple fronts, including valuation, timing and certainty of completion. The company pointed out that Netflix’s consideration comprises USD 23.25 in cash, Netflix shares currently valued at USD 4.11, and equity in a proposed Global Networks business. Paramount said it has assessed that equity component as having zero value.
Paramount also accused Warner Bros. Discovery of failing to clearly explain how debt associated with the Global Networks unit could reduce the overall cash and stock payout to shareholders. The company alleged that WBD’s regulatory filings lack customary financial disclosures, including details on how the Global Networks equity was valued, how the Netflix transaction itself was priced, how debt-related purchase price adjustments would work, and how a so-called “risk adjustment” was applied to Paramount’s USD 30-per-share proposal.
Under Delaware law, Paramount argued, such disclosures are mandatory when shareholders are required to vote on or evaluate a major investment decision.
As part of its broader strategy, Paramount said it will proceed with its tender offer and is considering nominating a slate of directors ahead of Warner Bros. Discovery’s 2026 annual meeting. If elected, those directors would be positioned to exercise WBD’s rights under the Netflix agreement to engage with Paramount. The company also said it plans to propose a bylaw amendment that would require shareholder approval for any separation of the Global Networks business.
Should Warner Bros. Discovery convene a special shareholder meeting to vote on the Netflix transaction, Paramount said it intends to actively solicit proxies opposing the deal.
Paramount further expressed surprise that WBD’s board did not respond to its December 4 offer or attempt any negotiations, raising questions about the decision-making process that led to acceptance of the Netflix agreement.
The dispute follows Warner Bros. Discovery’s December 2025 deal with Netflix, under which Netflix agreed to acquire WBD’s key assets — including Warner Bros. studios and HBO/Max — for approximately USD 83 billion in cash and stock. Under that arrangement, WBD would spin off its cable networks, such as CNN, into a separate entity.
Soon after, Paramount Skydance, led by David Ellison and backed by Oracle founder Larry Ellison, launched a renewed takeover bid to acquire all of Warner Bros. Discovery for USD 30 per share in cash — valuing the company at roughly USD 108 billion — arguing the proposal offers superior value to shareholders.
Warner Bros. Discovery’s board has repeatedly rejected Paramount’s overtures, most recently in early January 2026, citing concerns over leverage, execution risk and what it describes as the relative strength of the Netflix transaction.
Markets reacted cautiously to the latest developments. Shares of Warner Bros. Discovery fell 1.68 per cent to USD 28.40 on the New York Stock Exchange, while Netflix shares also edged lower, closing at USD 89.42. Paramount Skydance stock moved in the opposite direction, rising 0.75 per cent to end the session at USD 12.15.
