Paramount Takes Legal Action Against WBD Over Sale Details and Prepares for Proxy Fight to Challenge Netflix Deal
In a significant development, Paramount has announced its intention to nominate directors for election at the 2026 annual meeting of Warner Bros. Discovery (WBD). This move aims to oppose the approval of the Netflix transaction and follows the filing of a lawsuit in the Delaware Chancery Court, seeking essential disclosures for WBD shareholders. The goal is to enable them to make informed decisions regarding the tendering of their shares.
Paramount indicated the advance notice window for WBD’s 2026 annual meeting will open in three weeks. The company plans to present a slate of directors who, in line with their fiduciary responsibilities, will advocate for exercising WBD’s rights under the Netflix Agreement. This effort follows multiple rejections of Paramount’s all-cash offer of $30 per share, as WBD’s board opted for a deal with Netflix instead.
Additionally, Paramount intends to propose an amendment to WBD’s bylaws to necessitate shareholder approval before any separation of Global Networks. If a special meeting is called ahead of the annual gathering to vote on the Netflix Agreement, Paramount will actively seek proxies against that approval.
The legal action, filed on the same day in Delaware Chancery Court, requests that the court compel WBD to disclose pertinent information regarding the valuation of the Global Networks stub equity, the overall Netflix transaction, and the rationale behind the “risk adjustment” of Paramount’s $30 per share offer. Paramount’s bid involves acquiring all of WBD.
WBD shareholders need this information “to make an informed decision” about whether to tender their shares. The tender offer has been extended and is set to expire on January 21.
Paramount’s pursuit of WBD began shortly after the Skydance merger last summer, with several offers made before Warner WBD opened the bidding process. Ultimately, WBD chose a deal with Netflix, which involves a transaction valued at $27.75 in cash along with some Netflix stock for WBD’s studio and streaming assets. Plans are also in motion for WBD to spin off its linear television business, Discovery Global, into a separate public entity by the third quarter, prior to the closing of the Netflix deal.
Both agreements are subject to regulatory approval and are expected to take between 12 to 18 months to finalize.
More to come.
