Paramount also revealed its intent to initiate a proxy battle for Warner Bros Discovery board seats
Paramount Skydance has demanded that Warner Bros Discovery provide information about its merger agreement with Netflix in a recently filed suit, reported the Wall Street Journal.
Paramount aims to force Warner to detail how it valued the Netflix deal and its networks business. It also seeks an explanation from Warner regarding a clause that would permit a purchase price reduction if Warner’s debt is restructured.
Since the announcement of the multi-billion dollar Warner-Netflix merger, Paramount has insisted that its offer to Warner was better than Netflix’s. Paramount had made a bid to acquire Warner in its entirety, including cable networks like CNN and TNT, for US$77.9 billion.
Paramount claimed in a statement published by the Wall Street Journal that Warner had “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 also expressed its intent to initiate a proxy battle for Warner board seats by nominating director candidates who would engage its offer before Warner’s annual shareholder meeting.
Warner countered that its board had unanimously decided that Netflix’s offer was superior, partly because stockholders would maintain their shares in the portion of the company Netflix did not pick up. It said in a statement published by the Wall Street Journal that Paramount was “seeking to distract with a meritless lawsuit and attacks on a board that has delivered an unprecedented amount of shareholder value.”
Warner shareholders must engage with Paramount’s tender offer by January 21, with the deadline open to extension. According to the Wall Street Journal, Netflix declined to comment on the matter.
Regardless of whether Warner goes with Paramount of Netflix, regulatory approval must be secured for a deal to be completed. US president Donald Trump had previously expressed concerns with both Netflix and Paramount.
