Paramount Skydance sues Warner Bros over Netflix $82.7 billion deal

Paramount Skydance sued Warner Bros Discovery on Monday, seeking more information about the media company’s proposed $82.7 billion deal with Netflix, escalating a high-stakes fight for control of the Hollywood studio, according to Reuters.

The David Ellison-led company said it also plans to nominate directors to Warner Bros’ board, marking one of its most aggressive moves yet to persuade investors that its $108.7 billion all-cash bid is superior to Netflix’s cash-and-stock offer.

Paramount, Skydance and Netflix are competing for Warner Bros, whose assets include major film and television studios and a large content library featuring franchises such as Harry Potter and the DC Comics universe.

WBD last week rejected Paramount’s latest offer and advised shareholders to vote in favour of the streaming giant’s deal.

In a letter to shareholders, Paramount said it would also propose an amendment to WBD’s bylaws that would require shareholder approval for any separation of the company’s cable television business, a key element of the streaming platform transaction.

Paramount argues that its all-cash offer of $30 per share for all of Warner Bros is superior to Netflix’s offer of $27.75 per share for the company’s studios and streaming assets and would be more likely to clear regulatory hurdles.

The lawsuit was filed in the Delaware Court of Chancery and seeks to compel Warner Bros to disclose the financial analysis behind its board’s support for the Netflix merger.

The CBS parent said last week that the value of WBD’s cable spinoff was virtually worthless and reiterated its bid after another rejection by Warner Bros’ board. With Monday’s lawsuit, Paramount escalated its actions but did not increase its offer.

Warner Bros has said it would owe Netflix a $2.8 billion termination fee if it exits the agreement, part of an estimated $4.7 billion in additional costs associated with ending the deal.