Paramount Skydance Intensifies Hostile Bid for Warner Bros. Discovery

On Monday, Paramount Skydance ramped up its aggressive takeover attempt for Warner Bros. Discovery (WBD) by initiating a proxy fight aimed at seizing control of its board of directors. Additionally, it filed a lawsuit in Delaware seeking to enforce its all-cash offer of $30 per share.

This latest move follows allegations made by Paramount last month, accusing WBD’s board of shirking its fiduciary responsibilities by dismissing what Paramount described as a financially superior proposal, all while endorsing a $72 billion agreement with Netflix.

According to reports from last week, insiders suggested that Paramount had pivoted to a strategy dubbed “Plan D.” This approach seems to focus on a more gradual engagement with investors and regulators, highlighting potential regulatory challenges and financial risks associated with Netflix’s bid, rather than pushing for negotiations immediately.

Paramount has contended that the deal with Netflix could face a protracted antitrust review by the Justice Department, and it pointed out that WBD’s stock value is still on a downward trajectory. They raised concerns that the proposed cable spinoff may yield only about $1 per share for WBD’s investors.

On Monday, Paramount criticized WBD’s board for allegedly halting the sale process. The executives at WBD reportedly refrained from engaging after Paramount made its cash offer—even prior to any agreement for WBD to transfer its prominent film and television studios, including HBO and HBO Max, to Netflix.

In a letter aimed at shareholders, Paramount claimed that WBD altered its narrative to favor the Netflix arrangement while failing to provide direct financial comparisons between the two proposals, implying that silence speaks volumes.

Paramount expressed confusion over WBD’s lack of response regarding their December 4 offer, stating that there has been no attempt to clarify or negotiate. They also stated that WBD has come up with various justifications to evade a deal with them but has not clearly stated that Netflix’s proposal is financially superior to Paramount’s offer.

The escalation of Paramount’s activities includes efforts to nominate an entire board at WBD’s 2026 annual meeting and to block approval of the Netflix deal. The lawsuit in Delaware seeks transparency from WBD regarding the financial analyses that support its recommendations, including the evaluation of the Netflix deal and plans to separate WBD’s television networks into a publicly traded entity.

Paramount highlighted that the financial records they are requesting are standard and stress that WBD’s board has yet to clarify how it appraised the Netflix offer, how debt could impact shareholder dividends, and the rationale behind applying a “risk adjustment” to their cash proposal.

The lawsuit is timely, as Paramount is pushing for these disclosures before shareholders make their choices regarding the Netflix merger or a public offering of the company.

According to the complaint, Delaware law necessitates that WBD’s board furnish shareholders with comprehensive financial assessments when urging a decision on competing bids. The argument posits that without this vital information, shareholders cannot make well-informed choices about valuing the cable spinoff and the Netflix deal collectively.

Netflix has opted not to comment on this matter. Efforts to reach WBD for their response are ongoing.