Paramount Files Lawsuit Against Warner Bros... "Disclose Netflix Deal Basis"

Paramount Skydance (hereinafter referred to as Paramount) has taken strong action in response to Warner Bros. Discovery (hereinafter referred to as Warner Bros.) rejecting its acquisition proposal, initiating legal measures.

⬦ "Disclose the Basis for the Netflix Deal"... Lawsuit Filed in Delaware Court

According to Bloomberg and CNBC, David Ellison, CEO of Paramount, officially announced the filing of a lawsuit against Warner Bros. and CEO David Zaslav in a letter sent to Warner Bros. shareholders on the 12th (local time).

The core of this lawsuit is the demand for the disclosure of information related to the ongoing deal between Warner Bros. and Netflix. CEO Ellison pointed out that Warner Bros. has not disclosed its method for valuing its equity, the overall valuation method for the Netflix deal, the application of purchase price reductions due to debt, and even the basis for 'risk adjustment' for the all-cash acquisition proposal.

He requested the Delaware court to order Warner Bros. to disclose this information, explaining that this is a measure to allow shareholders to make a reasonable judgment regarding Paramount's all-cash acquisition proposal of $30 per share.

⬦ "We Will Change the Board"... Proxy Fight Anticipated

CEO Ellison also revealed plans to engage in a proxy fight to elect directors selected by Paramount at this year's Warner Bros. shareholders meeting.

This move follows the decision made by the Warner Bros. board on the 7th to reject Paramount's revised acquisition proposal and maintain the existing agreement with Netflix.

Paramount was the first to enter the acquisition battle for Warner Bros. last year, but the Warner Bros. board chose Netflix as the final transaction target during the competitive bidding process earlier last month. Warner Bros. has agreed to sell its streaming and studio divisions to Netflix for $72 billion ($27.75 per share).

In response, Paramount declared a hostile takeover and initiated a public tender offer at $30 per share. After the Warner Bros. board's rejection, CEO Ellison submitted a revised proposal guaranteeing personal financing from his father, Larry Ellison, Oracle Chairman (approximately $40.4 billion), but it was rejected again.

With Paramount's lawsuit, the acquisition battle for Warner Bros. is expanding into a full-fledged legal dispute. Meanwhile, Netflix has submitted its merger filing to the authorities and is undergoing the antitrust approval process.