Warner Bros Discovery (WBD) released a sharp statement on Tuesday. The company called Paramount’s offer “not superior to the Netflix merger” and labeled the lawsuit as meritless. WBD also warned shareholders that the board has created record value for investors.
Paramount Files Suit in Delaware Court
Paramount filed a case in the Delaware Chancery Court early Wednesday. The filing asks the court to force WBD to reveal how it values the Global Networks stub equity, the Netflix transaction, and the debt reduction mechanism. Paramount also announced it will nominate directors for WBD’s 2026 annual meeting. The move sets up a proxy fight that could derail the Netflix deal.
A proxy fight lets shareholders vote on new directors and other proposals. If Paramount wins enough votes, it could replace board members who support the Netflix merger. The fight could also force a special meeting to vote on the Netflix agreement. Such actions often create uncertainty for the market and can delay any deal.
The Netflix Deal Details
Netflix proposed to buy WBD’s studio and streaming assets for $27.75 in cash plus Netflix stock. The agreement also calls for the spin‑off of WBD’s linear television business, Discovery Global, into a separate public company later this year. Both the Netflix and Paramount offers require regulatory approval and could take 12 to 18 months to close.
Paramount has offered to purchase all of WBD for $30 per share in cash. Larry Ellison pledged to backstop the equity portion of the offer. Paramount says it has addressed every concern raised by WBD, including financing restrictions and the timing of the Discovery Global spin‑off.
Shareholder Guidance from WBD
WBD has warned shareholders twice not to tender their shares to Paramount. The board argues that the Paramount offer lacks transparency and would see a smaller company acquire a larger one. WBD does not dispute the economics of the Netflix deal but points to the complexity of the Paramount proposal.
What Comes Next?
The deadline for the Paramount tender offer expires on January 21. WBD shareholders will receive more information before the 2026 annual meeting. The outcome of the proxy fight and the Delaware lawsuit will likely shape the future of the Warner Bros Discovery Netflix merger.
Source: Deadline
