Paramount Skydance sues Warner Bros. Discovery over deal with Netflix in escalating takeover battle

Paramount Skydance on Monday launched a suit against Warner Bros. Discovery and CEO David Zaslav in Delaware Chancery Court, escalating its hostile bid for the media company and seeking to force additional disclosures about Warner Bros. Discovery’s pending deal with Netflix. After Netflix and Warner Bros. had seemingly come to a deal, Paramount attempted to buy Warner Bros. instead, but that was rejected by the board.

In a letter to shareholders, Paramount CEO David Ellison stated that the lawsuit aims to compel Warner Bros. Discovery to provide financial details underlying its recommendation that investors support the Netflix transaction over Paramount’s $30-per-share, all-cash offer. Ellison said Warner Bros. Discovery has not disclosed how it valued the cable-networks business that would be separated into a new public company under the Netflix deal, how it valued the overall transaction, how debt adjustments reduce the purchase price, or how the board calculated what it calls a “risk adjustment” when comparing the Netflix deal with Paramount’s offer.

Paramount said the lack of disclosure prevents shareholders from making an informed decision as its tender offer approaches its current expiration later this month. The company requested that the court order Warner Bros. Discovery to provide the information on an expedited basis.

Ellison also told shareholders that Paramount intends to nominate directors for election to Warner Bros. Discovery’s board at the company’s 2026 annual meeting, setting the stage for a proxy fight over the Netflix deal. Warner Bros. Discovery rejected the claims, calling the lawsuit meritless, and said Paramount has failed to raise its bid or fix what the board has described as deficiencies in the offer. The company again urged shareholders to reject Paramount’s proposal in favor of the Netflix transaction.

Warner Bros. Discovery last month agreed to sell its studio and streaming business to Netflix in a deal valued at about $72 billion, while spinning off its cable networks into a separate public company. Paramount has offered to buy all of Warner Bros. Discovery’s assets for $30 per share in cash. Paramount’s amended bid, submitted in late December, sought to address concerns about financing certainty but did not increase the offer price.