Paramount Files Lawsuit Against WBD

Paramount Skydance has filed a lawsuit against Warner Bros. Discovery, seeking disclosure of more information to WBD shareholders.

In a letter to WBD shareholders, Paramount’s Chairman and CEO David Ellison, said, “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.”

He continued, “Along with the WBD shareholders, we have asked for the customary financial disclosure a board is supposed to provide shareholders when making an investment recommendation. But in each of its 14D-9 filings, 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.

“WBD shareholders need this information to make an informed investment decision on our offer—and importantly, Delaware law has consistently required that such information be provided to shareholders. Following the process prescribed under Delaware law, we filed suit this morning 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.

“We do not undertake any of these actions lightly. 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. Our objective from the moment we approached WBD was for a collaborative negotiation and a successful transaction that would be a win for both companies, both shareholder groups and all stakeholders.”