In a dramatic escalation of the battle for control of Warner Bros Discovery (WBD), rival media giant Paramount Skydance has launched a multi-pronged offensive to derail WBD's proposed $82.7bn (£61.4bn) deal with streaming titan Netflix.
Hostile Moves: Board Nominations and Legal Action
Paramount confirmed on Monday that it intends to nominate its own slate of directors for election to the WBD board at the company's upcoming annual meeting, typically held in June. The explicit goal of this move is to secure votes against the approval of the Netflix agreement. This aggressive tactic is part of Paramount's own $108.4bn hostile takeover bid for WBD, which is personally backed by a $40bn guarantee from Oracle co-founder Larry Ellison.
Simultaneously, Paramount has filed a lawsuit seeking the disclosure of key financial information related to the Netflix transaction. The company argues that WBD shareholders need "basic information"—including how WBD has valued the global networks business containing CNN, Cartoon Network, and Discovery Channel—to make an informed decision. Paramount's CEO, David Ellison, stated in a letter to investors: "We are committed to seeing our tender offer through. We understand, however, that unless the WBD board of directors decides to engage with us... this will likely come down to your vote at a shareholder meeting."
The Stakes: Prize Assets and Competing Offers
The proposed Netflix deal would see the streaming service take control of WBD's crown jewels, including the legendary Warner Bros studio—home to franchises like Harry Potter, Superman, and Batman—and the premium cable network HBO, producer of hits like Game of Thrones and Succession. Netflix has offered $23.25 per share in cash plus stock and equity in the spun-off global networks unit, which Paramount values at zero.
In contrast, Paramount is pitching a all-cash offer of $30 per share, which includes acquiring the global networks. Paramount contends this is a superior deal for shareholders. The WBD board, however, has twice rejected Paramount's bid as "inadequate," labelling it the "largest leveraged buyout (LBO) in history" and highlighting its associated risks.
Next Steps and Potential Fallout
Paramount has also announced its intention to propose an amendment to WBD's corporate bylaws to mandate a shareholder vote on the spin-off of the global networks business. David Ellison warned that if WBD calls a special meeting to vote on the Netflix deal before the annual meeting, Paramount will actively solicit proxies to vote against it. "These actions, coupled with our tender offer, ensure that you get the final decision on which offer is better for you," he said.
The financial penalties for walking away are substantial. WBD would face a $2.8bn breakup fee if it abandoned the Netflix agreement. Paramount has increased its own proposed termination fee to $5.8bn to match Netflix's, but WBD estimates accepting Paramount's offer would incur $4.7bn in costs, including the Netflix fee and additional debt expenses.
Ellison emphasised the seriousness of Paramount's actions: "We do not undertake any of these actions lightly... Make no mistake, our goal remains to have constructive discussions with WBD’s board." The stage is now set for a protracted and high-stakes corporate showdown, with the future of some of Hollywood's most iconic assets hanging in the balance.
