Paramount Skydance sues Warner Bros. Discovery, escalating takeover fight

Paramount Skydance has taken its takeover fight with Warner Bros. Discovery into court, filing a lawsuit that intensifies its hostile bid for the media company and sharpens scrutiny of a deal Warner Bros. Discovery has struck with Netflix.

In a complaint filed in Delaware, Paramount Skydance accused Warner Bros. Discovery and its chief executive, David Zaslav, of failing to provide shareholders with sufficient information about the company’s sale process and the terms of its proposed transaction with Netflix. The lawsuit seeks to force additional disclosures, arguing that investors cannot fairly evaluate Paramount’s all-cash offer without a clearer accounting of how Warner Bros. Discovery assessed the value of its businesses.

David Ellison, the chief executive of Paramount Skydance, said shareholders deserved greater transparency on how the company valued its Global Networks division, how the Netflix transaction was priced, and how debt-related adjustments were incorporated into the deal. The disclosures made so far, he said, fall short of explaining the assumptions and methodologies underpinning those decisions.

The legal action follows Warner Bros. Discovery’s board reiterating its recommendation that shareholders reject Paramount’s revised proposal, which did not raise the purchase price. Paramount has argued that its bid offers greater certainty and value than Warner Bros. Discovery’s agreement with Netflix, and has repeatedly questioned whether the company’s board ran a fair and impartial sale process.

Last month, Warner Bros. Discovery announced plans to sell its HBO Max streaming service and its film studio to Netflix, while spinning off its portfolio of cable television networks into a separately listed company. Paramount had previously made several unsolicited approaches to acquire all of Warner Bros. Discovery’s assets, including its global television networks, but those overtures were rebuffed.

After the Netflix agreement was unveiled, Paramount Skydance made its takeover bid public, proposing to acquire the entire company. While it has modified aspects of the offer since then, Paramount has so far declined to increase its valuation, setting the stage for a legal and strategic battle that now appears likely to play out in court as well as in the market.