Warner Critiques Paramount’s Push for a Faster Trial as a Display of Urgency Ahead of Upcoming Hearing
Warner Bros. Discovery Responds to Paramount’s Motion for Expedited Trial
Warner Bros. Discovery (WBD) recently issued a rebuttal to Paramount’s request for an expedited trial in Delaware Chancery Court, characterizing it as “an exercise in urgency theatre — ringing a fire alarm in the absence of any flames or even smoke.” This motion comes as part of the ongoing contention between the two media giants over a merger deal.
Paramount seeks to compel WBD to support its bid amid a dispute over control and has filed a lawsuit demanding extensive documentation. The company is pushing for a swift judicial review ahead of a January 21 deadline that requests WBD stockholders to tender their shares.
“Paramount contends that an expedited trial is needed to compel WBD to disclose more because the board requests stockholder action, but it is Paramount — not WBD — that is asking stockholders to act now,” a representative from WBD stated. “Paramount has launched a hostile tender offer and set its own expiration date of January 21, yet it has the unilateral ability to extend that deadline, admitting that this offer is neither its ‘best and final’ nor likely to close this year. There is no other urgency identified, and none exists.”
In anticipation of shareholder deliberations, WBD plans to release its merger proxy, which will detail the board’s rationale for recommending the Netflix transaction. The proxy will include information on the deal’s value and summaries from WBD’s financial advisors regarding their fairness opinions. A shareholder meeting to vote on the deal has yet to be scheduled.
WBD maintains that Paramount’s motion is unfounded and should be postponed until the Netflix merger proxy is filed. The company described the situation as “a would-be hostile acquirer seeking to use this Court as its backdoor into the boardroom.”
In response, Paramount insists that shareholders require more information to make informed decisions regarding their shares.
Vice Chancellor Morgant T. Zurn has scheduled a hearing for Thursday morning to review Paramount’s motion for an expedited trial.
This latest legal maneuver is part of a broader struggle between the Ellison family and Netflix for control of WBD, which has been navigating significant debt and declining linear television viewership. Despite these challenges, WBD has demonstrated its resilience, recently showcased by a notable Golden Globes sweep.
Last month, WBD agreed to sell its studios and streaming assets to Netflix, while advising shareholders to reject Paramount’s $30-per-share cash takeover offer. Furthermore, Ellison has plans to nominate directors sympathetic to Paramount during WBD’s upcoming annual meeting, aiming to undermine the Netflix deal.
As negotiations continue, reports suggest that Netflix may pivot to an all-cash offer instead, shifting from its current offer of $27.75 per Warner Bros. asset, comprising $23.25 in cash and $4.50 in Netflix shares. Paramount has reiterated that cash offers are more straightforward for shareholders.
