Paramount sues Warner Bros. to derail his deal with Netflix

The studio rejected by WBD intends to take the case to court. the takeover of the historic studio could drag on.

Paramount has filed a lawsuit against Warner Bros. Discovery (WBD) regarding its pending deal with Netflix.

We know that Netflix has announced its intention to acquire Warner Bros. Discovery, for $83 billion. However, the operation is far from finalized, with many parameters remaining to be defined.

Another takeover candidate, Paramount Pictures, led by David Ellison, who has coveted the historic studio for several years, saw its offer of $30 per share rejected by WBD. A refusal that did not go away.

According to DeadlineParamount has therefore just filed a complaint in order to obtain information deemed insufficient on the contours of the potential agreement between WBD and Netflix.

Specifically, the complaint asks “for the court to order WBD to disclose information on how Global Networks’ remaining stake was valued, the overall valuation of the Netflix transaction, the debt purchase price reduction mechanism, and the basis of the ‘risk adjustment’ applied to our all-cash offer of $30 per share.”.

Deadline specifies that Netflix’s offer would be $27.75 in cash, supplemented by Netflix shares, to buy WBD’s studio and streaming activities. The linear television business, Discovery Global, would be spun off and listed on the stock market in the third quarter, before the deal is finalized. Note that the Netflix and Paramount projects both require regulatory authorizations, with deadlines estimated between 12 and 18 months.

Another point of tension: Paramount now intends to propose its own directors at the 2026 annual general meeting of Warner Bros. Discovery, in order to campaign against the approval of the deal with Netflix. If successful, the board of directors could thus switch in favor of the Paramount option rather than Netflix.

Finally, Paramount also plans to submit an amendment to WBD’s bylaws, aimed at making shareholder approval mandatory for any split from Global Networks. What if Warner Bros. Discovery called an extraordinary general meeting before its annual meeting to validate the Netflix agreement, Paramount announced that it would actively solicit proxies against this approval.

In short, Paramount does not want to let go of the matter and is embarking on a legal and strategic standoff that could drag out the Netflix deal for a while…