Posted in: HBO, Max, Netflix, Opinion, Paramount+, TV, TV | Tagged: netflix, paramount, warner bros discovery

Paramount/Netflix Fight Goes to Court, WBD Shareholders Meeting

Paramount Skydance made a legal move regarding Netflix and plans an even bigger move during Warner Bros. Discovery's shareholders meeting.

David Ellison and Paramount Skydance are making it clear that they won't be ignored when it comes to making a play for Warner Bros. Discovery and potentially scuttling the existing deal between WBD and Netflix. Less than a week after the WBD board voted to reject Paramount Skydance's revised offer and recommend to its shareholders that the announced deal with Netflix should move forward, Ellison's company is going the "Fatal Attraction" route. On Monday, Paramount Skydance announced its intentions to nominate a slate of directors for election at the Warner Bros. Discovery 2026 annual meeting to work against the Netflix deal. In addition, a suit was filed in the Delaware Chancery Court that seeks to force WBD/Netflix to provide "basic information to enable WBD shareholders to make an informed decision" regarding the announced deal, allowing them to consider all options.

Last week, WBD's board announced its official rejection of the offer in a letter to its shareholders and on WBD's corporate website. "The Board unanimously determined that the Paramount's latest offer remains inferior to our merger agreement with Netflix across multiple key areas," said Samuel A. Di Piazza, Jr., Chair of the Warner Bros. Discovery Board of Directors. "Paramount's offer continues to provide insufficient value, including terms such as an extraordinary amount of debt financing that create risks to close and lack of protections for our shareholders if a transaction is not completed. Our binding agreement with Netflix will offer superior value at greater levels of certainty, without the significant risks and costs Paramount's offer would impose on our shareholders." In the letter to shareholders (available here), the board offered a number of bullet points to explain why Paramount's sixth offer was rejected, with specific details to help make their case:

PSKY Offer's Insufficient Value: "PSKY's offer is inferior given significant costs, risks and uncertainties as compared to the Netflix merger."

Lack of Certainty in PSKY's Ability to Close the Transaction: "The extraordinary amount of debt financing, as well as other terms of the PSKY offer, heighten the risk of failure to close, particularly when compared to the certainty of the Netflix merger."

Consequences for WBD Shareholders Should PSKY Fail to Close the Transaction: "If PSKY fails to close its offer, WBD shareholders would incur significant costs and potentially considerable value destruction."

The PSKY Offer Is Not Superior, or Even Comparable, to the Netflix Merger: "PSKY has repeatedly failed to submit the best proposal for WBD shareholders despite clear direction from WBD on both the deficiencies and potential solutions."

"The WBD Board remains fully supportive of and continues to recommend Netflix's merger agreement, recognizing it as the superior proposal that will deliver the greatest value to its stockholders, as well as consumers, creators and the broader entertainment industry," shared co-CEOs Ted Sarandos and Greg Peters regarding the decision. "Netflix and Warner Bros. will bring together highly complementary strengths and a shared passion for storytelling. By joining forces, we will offer audiences even more of the series and films they love—at home and in theaters—expand opportunities for creators, and help foster a dynamic, competitive, and thriving entertainment industry."

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