Paramount Skydance is suing Warner Bros. Discovery (WBD) after it turned down Paramount’s hostile takeover bid and chose to move ahead with a deal with Netflix instead.
Paramount said on Jan. 12 that WBD failed to provide shareholders with sufficient financial disclosure about its proposed $72 billion transaction with Netflix.
In a lawsuit filed in the Delaware Chancery Court, Paramount is requesting that WBD disclose details about its sale process and the valuation underpinning its pending deal with Netflix.
“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,” Paramount Skydance CEO David Ellison said in a company-wide letter.
The legal move comes after WBD advised its shareholders to again rebuff Paramount Skydance’s all-cash, $30-per-share takeover bid offer on Jan. 7 and instead back a competing offer from Netflix.
Paramount has made three hostile bids to acquire all of WBD, including its television networks, but these have been rejected by the WBD board.
WBD has told its shareholders that Paramount’s offer represents “insufficient value” compared with the Netflix agreement.
In December 2025, Netflix announced that it had agreed to acquire WBD’s film studio and streaming platform, HBO Max, concluding what it described as an intensive bidding process for the assets. The transaction values WBD at $27.75 per share, representing an equity value of about $72 billion and an enterprise value of nearly $83 billion.
Shareholders are set to receive $23.25 in cash and $4.50 in Netflix stock for each share of WBD, in addition to shares in the spun-off Global Networks business.
Direct Appeal
In his Jan. 12 letter to shareholders, Ellison said Paramount’s $30-per-share cash offer exceeded the value of the Netflix consideration once market movements and the Global Networks spinoff were taken into account.
Paramount also questioned how debt transferred to the spun-off Global Networks business would reduce the cash and stock consideration payable to shareholders, saying that WBD has not explained the mechanism.
“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,” Ellison said.
On Jan. 8, Paramount took its bid directly to WBD shareholders after the board declined further talks. Paramount urged WBD investors to tender their shares into its offer by a Jan. 21 deadline and bypass the company’s board.
In its statement on Jan. 12, Paramount signaled that it is preparing for a prolonged proxy fight if the board does not engage.
Proxy Fight
Ellison said Paramount plans to nominate a slate of directors at WBD’s next shareholder meeting who would, if elected, seek to engage with Paramount under the terms of the Netflix agreement.
Paramount also said it would propose a bylaw amendment requiring shareholder approval for any separation of Global Networks and would solicit proxies against the Netflix transaction if WBD calls a special meeting to approve the deal.
Despite the litigation and takeover tactics, Ellison said Paramount’s preference remained a negotiated transaction.
“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,” he said.
Netflix and WBD did not respond to requests for comment.
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