Paramount Skydance took legal action against Warner Bros Discovery on Monday. The company filed a lawsuit demanding greater disclosure about Warner Bros Discovery's proposed $82.7 billion deal with Netflix. This move escalates a high-stakes battle for control of one of Hollywood's most famous media groups.
Aggressive Tactics in Takeover Battle
The David Ellison-led company announced several aggressive steps. Paramount plans to nominate directors to the Warner Bros Discovery board. The company also prepares for a proxy contest. These actions represent Paramount's most forceful moves yet to convince shareholders that its hostile bid is superior.
Paramount offers $30 per share in an all-cash deal. This contrasts with Netflix's $27.75 per share cash-and-stock offer. The company believes its proposal provides better value for Warner Bros Discovery shareholders.
Legal Action in Delaware Court
Paramount filed its lawsuit in Delaware Chancery Court. The legal action seeks to compel Warner Bros Discovery to disclose specific details. Paramount wants information about how Warner Bros Discovery valued the Netflix deal. The company also demands transparency about the planned spin-off of Global Networks assets and any associated debt transfers.
In a letter to shareholders, Paramount explained its position. "Shareholders cannot make an informed decision without those details," the company stated. Paramount argues that Warner Bros Discovery has provided various reasons for avoiding a transaction but has never claimed the Netflix deal is financially superior.
Proposed Bylaw Amendment
Paramount plans another significant move. The company will propose an amendment to Warner Bros Discovery's bylaws. This amendment would require shareholder approval for any separation of the company's cable television business. The cable division represents a central component of the Netflix transaction.
"Paramount will propose an amendment to WBD's bylaws to require WBD shareholder approval for any separation of Global Networks," the company stated in a press release. "This ensures that you get the final decision on which offer is better for you."
Financial Guarantees and Revised Offer
Paramount recently revised its acquisition offer. The company increased its bid to $108.4 billion after another rejection by the Warner Bros Discovery board. The revised proposal includes substantial financial backing.
Larry Ellison provides personal guarantees for $40 billion in equity. The Oracle co-founder is the father of Paramount chief executive David Ellison. The offer also includes $54 billion in debt financing.
Paramount criticized the proposed cable spin-off last week. The company called the planned separation "virtually worthless" and pointed to weak performance of similar transactions. Paramount specifically mentioned Versant, Comcast's cable spin-off, as evidence that such deals destroy shareholder value.
Shareholder Decision Looms
Warner Bros Discovery's refusal to engage with Paramount leaves shareholders as ultimate decision-makers. Paramount addressed this situation in a separate press release. "Over the last few days, following the decision by Warner Bros. Discovery not to engage with Paramount on our $30 per share cash offer, we keep getting the same question: what happens next?" the company stated.
Paramount plans to nominate a slate of directors at Warner Bros Discovery's 2026 annual meeting. If necessary, the company will seek votes against approval of the Netflix transaction. Paramount's tender offer is set to expire on January 21, though the company has the option to extend it.
Market Reaction and Industry Context
Financial markets reacted to the escalating conflict. Shares of Warner Bros Discovery fell 1.5 percent in early trading. Netflix shares rose 0.8 percent during the same period. Paramount gained 0.3 percent in early market activity.
Neither Netflix nor Warner Bros Discovery immediately responded to requests for comment about the lawsuit and proxy fight preparations.
Warner Bros Discovery owns valuable media assets including HBO, CNN, and Warner Bros Studios. The company's extensive content library features popular franchises like Harry Potter and DC Comics. This takeover battle highlights intensifying competition between traditional media companies and streaming giants.
Legacy media firms seek scale through consolidation while streaming companies pursue growth through acquisitions. The Paramount-Warner Bros Discovery conflict represents a significant chapter in this ongoing industry transformation.
