WBD : is being sued by Paramount Skydance, which claims the Netflix purchase undervalues stockholders
WBD: Paramount Skydance Corporation has escalated its challenge against Warner Bros. Discovery’s (WBD) USD 82.7 billion acquisition with Netflix by bringing a case against WBD in the Delaware Chancery Court.
The legal action is being taken as Paramount continues to pursue its all-cash offer of USD 30 per share for WBD, which it claims is more financially advantageous than the Netflix deal.
Paramount outlined its next moves and said that it is seeking further financial information about the Netflix agreement so that shareholders may make an educated choice in a letter delivered to WBD shareholders on Monday.
It said, “WBD has provided increasingly novel reasons for avoiding a transaction with Paramount, but what it has never said, because it cannot, is that the Netflix transaction is financially superior to our actual offer.”
According to Paramount, the Netflix contract is not as good in terms of time, value, or closure assurance. The firm claims that Netflix’s payment consists of USD 23.25 in cash, USD 4.11 in Netflix shares at the moment, and stock in a future Global Networks entity that Paramount claims to have examined and found to have no equity value.
Additionally, according to Paramount, WBD failed to reveal how the debt transfer from Global Networks may lower the amount of cash and stock consideration owed to stockholders.
According to the company, WBD has not disclosed certain standard financial information in its filings, such as how it valued the equity in Global Networks, how it valued the entire Netflix deal, how the debt purchase price reduction operates, and how it applied a “risk adjustment” to Paramount’s offer of USD 30 per share.
According to Paramount, when shareholders are asked to make an investment choice, Delaware law mandates these kinds of disclosures.
Paramount said that it would proceed with its tender offer and may propose a board of directors before to WBD’s 2026 annual meeting as part of its plan.
If chosen, these directors would use WBD’s contractual authority to interact with Paramount under the terms of the Netflix agreement. Additionally, Paramount intends to suggest a bylaw change that would need shareholder consent for any division of Global Networks. Paramount said that it would seek proxies to oppose the Netflix agreement’s ratification if WBD summons a special meeting to vote on it.
Additionally, Paramount questioned the board’s decision to accept the Netflix contract and expressed astonishment that WBD did not reply to its December 4 offer or make an effort to negotiate.
This comes a month after Warner Bros. Discovery and Netflix reached an agreement in December 2025 which Netflix agreed to pay around USD 83 billion (cash + stock) to acquire WBD’s major assets, including Warner Bros. studios, HBO/Max streaming, etc., while WBD spun off its cable networks, including CNN, independently.
Claiming it would benefit shareholders, Paramount Skydance, headed by David Ellison and supported by his father Larry Ellison, made another takeover attempt to purchase all of WBD for USD 30 per share, all cash (about USD 108 billion).
The WBD board has consistently turned down Paramount’s bids, most recently in early January 2026, citing their inferiority, danger (too much debt), and decision to remain with Netflix.
Warner Bros. Discovery and Netflix’s stock prices fell on Monday at the New York Stock Exchange, although Paramount Skydance’s finished higher. At USD 12.15 at the close of the session, Paramount Skydance shares had gained 0.75 percent. Warner Bros. Discovery shares, meanwhile, dropped 1.68 percent to USD 28.40. Additionally, Netflix’s stock fell slightly, closing down at USD 89.42 per share.