Paramount Skydance takes legal action against Warner Bros. Discovery amid takeover battle

Paramount Skydance has filed a lawsuit against Warner Bros. Discovery (WBD) and its chief executive David Zaslav, escalating its hostile bid to acquire the media group. The legal move follows WBD’s board reiterating its recommendation that shareholders reject Paramount’s revised offer.

The lawsuit, filed in a Delaware court, seeks to compel Warner Bros. Discovery to disclose further details about its sale process and its proposed transaction with Netflix. Paramount Skydance chief executive David Ellison said shareholders need greater clarity on how WBD assessed the value of its assets and structured the Netflix deal in order to make an informed decision.

According to Ellison, the disclosures provided by WBD do not sufficiently explain how the company valued the Global Networks business, how the overall Netflix transaction was priced, or how debt-related adjustments were factored into the deal. Paramount argues that this lack of information makes it difficult for shareholders to fairly compare the competing proposals.

The legal action comes shortly after Warner Bros. Discovery’s board again advised investors to reject Paramount’s amended bid, which did not include a higher purchase price. Paramount has maintained that its all-cash offer is superior to WBD’s agreement with Netflix and has repeatedly questioned the fairness of the sale process.

Also read: Paramount says Warner Bros cable channels are worth nothing

Last month, Warner Bros. Discovery agreed to sell its streaming platform HBO Max and its film studio to Netflix, while planning to spin off its portfolio of cable television networks into a separate listed entity. Paramount had earlier made multiple unsolicited approaches to acquire all of WBD’s assets, including its global television networks, but these were rejected.

Following the Netflix agreement, Paramount Skydance made its takeover bid public, offering to acquire the entire company. While it has adjusted certain terms of the proposal, it has so far stopped short of increasing the offer value.

Also read: Warner Bros rejects revised Paramount bid as risky leveraged buyout