Paramount Skydance Sues Warner Bros Over Netflix Deal in Hostile Takeover Battle

BENGALURU/LOSANGELES, Jan 12, 2026 (Epicstorian News) — Paramount Skydance filed a lawsuit against Warner Bros Discovery in the Delaware Court of Chancery on Monday, demanding disclosure of detailed financial analyses related to Warner Bros’ proposed merger with Netflix, according to court filings and shareholder communications.

The legal action coincided with Paramount’s announcement that it will seek to nominate directors to Warner Bros’ board at the company’s next shareholder meeting, part of an escalating campaign to challenge the existing transaction with Netflix and advance its own acquisition bid.

The lawsuit seeks to compel Warner Bros and its board of directors to provide shareholders with comprehensive information on how the company evaluated the competing offers from Netflix and Paramount Skydance, as required under Delaware corporate law.

Paramount asserted that Warner Bros has failed to disclose key valuation details, including how it calculated the financial merits of Netflix’s $82.7 billion deal and applied risk adjustments to Paramount’s all‑cash offer.

Paramount reiterated that its tender offer of $30 per share in cash for all outstanding Warner Bros Discovery shares is superior to the Netflix proposal, which combines $27.75 per share in cash and stock for the studio and streaming assets but excludes the company’s cable‑networks business.

In a letter to shareholders accompanying the lawsuit filing, Paramount said the information it seeks is necessary for investors to make an informed choice between the rival transactions.

The lawsuit also asked the court to mandate correction of what Paramount described as “misleading” disclosures and to compel Warner Bros to provide details on investment bankers’ analysis and specific valuations of the competing deals.

Paramount’s complaint said Warner Bros’ board recommended shareholders reject Paramount’s offer without providing customary financial disclosures that would help them evaluate both transactions.

Paramount’s legal filing noted that the Netflix merger agreement includes a “no‑shop” provision that restricts Warner Bros from negotiating with or disclosing non‑public information to other bidders, a standard condition designed to protect the merger process.

Paramount cited the lack of financial detail on how Warner Bros arrived at its recommendation as a primary reason for its Delaware court action.

The legal action escalates a takeover battle that began in late 2025, when Paramount Skydance launched an unsolicited tender offer for Warner Bros Discovery after Warner Bros agreed to sell its studio and streaming operations to Netflix.

Warner Bros announced its plan to spin off its cable‑networks business into a separate entity, Discovery Global, before closing the Netflix transaction. Paramount’s offer, in contrast, was for Warner Bros as a full entity, including the cable networks.

The Warner Bros board of directors rejected Paramount’s initial offers multiple times, asserting that the Paramount bid posed higher risks and offered insufficient value compared with the Netflix transaction.

In early January, the board issued a letter unanimously urging shareholders not to tender into Paramount’s hostile offer while reaffirming support for the Netflix agreement, citing concerns about Paramount’s ability to complete its proposed leveraged buyout.

Warner Bros Discovery’s board has repeatedly characterized Paramount’s amended bid as inferior across several key measures, including heightened execution risk and increased debt burden that could jeopardise closing.

The board unanimously determined that the terms of Paramount’s offer do not meet the criteria of a “Superior Proposal” under the merger agreement with Netflix and recommended shareholders reject Paramount’s tender offer.

The Netflix deal calls for Netflix to acquire Warner Bros Discovery’s studios, HBO and HBO Max streaming services, and associated content businesses, while the planned Discovery Global spin‑off would house legacy cable networks such as CNN, TBS, and HGTV.

Paramount has argued that the value of the Discovery Global assets is minimal and that excluding them from the Netflix transaction reduces the overall economic benefit to Warner Bros shareholders, a point Paramount has pressed in its outreach to investors.

Corporate filings show that Paramount’s tender offer is scheduled to expire on January 21, but the company retains the option to extend that deadline.

Paramount has publicly stated that its tender offer remains open and that it is committed to the full execution of its $30 per share cash bid, contingent on shareholders having access to accurate comparative information regarding the two competing offers.

In the lawsuit and the accompanying shareholder letter, Paramount said its next strategic step is to nominate a slate of directors at Warner Bros’ upcoming annual meeting who would be positioned to engage in discussions about Paramount’s offer and potentially reconsider the company’s stance on the Netflix agreement if elected.

Paramount also said it plans to advocate for a bylaw amendment that would require shareholder approval before any separation of the Discovery Global business.

Paramount’s board nomination strategy seeks to give shareholders the final decision on which transaction they deem more favourable, and Paramount made clear in its communication that it may solicit proxy votes against the Netflix deal if a special meeting is called ahead of the annual session.

Paramount’s proxy efforts are aimed at ensuring that its own slate of directors could participate in decisions about potential engagement with Paramount’s offer.

In response to the lawsuit, Warner Bros Discovery released a statement calling the legal action “meritless,” saying Paramount has yet to raise the price of its offer or address what Warner Bros identified as deficiencies in its proposal.

Warner Bros said Paramount’s continued campaign, including repeated press releases, has not changed the board’s position that the Netflix deal offers greater certainty and value, and that Paramount’s all‑cash offer failed to present superior terms.

Warner Bros also reiterated its belief that Paramount’s tender offer carries significant execution risks due to the large amount of debt financing required to support the deal, underlining concerns that unfavourable changes in financial conditions could affect closing.

Warner Bros linked these risks to its board’s recommendation that shareholders stick with the Netflix transaction, which the board said provides more predictable outcomes for investors.

The dispute between Paramount and Warner Bros has had immediate effects on stock prices, with Warner Bros shares declining as market participants reacted to the legal filing and proxy announcements, while shares of Paramount and Netflix showed modest movements in early trading.

These price shifts reflect investor uncertainty ahead of the crucial shareholder decisions that could determine the fate of the competing takeover strategies.

Paramount’s efforts to compel Warner Bros to disclose full financial comparisons underscore broader questions about fiduciary duties and disclosure standards when corporate boards recommend one transaction over another in the face of a contested takeover bid.

Paramount’s suit contends that providing shareholders with detailed valuations and risk analyses is essential for them to exercise their rights when deciding whether to tender into a hostile offer or support the board’s preferred alternative.

Legal observers note that under Delaware law, boards are obligated to provide adequate information to shareholders to enable informed voting or tender decisions when faced with competing offers, and that failure to provide such information can be grounds for judicial review.

Paramount’s complaint cites this legal standard in seeking to compel Warner Bros to furnish the missing financial analyses that would allow shareholders to compare the Netflix transaction and Paramount’s tender offer on an apples‑to‑apples basis.

Paramount’s proxy strategy could reshape the composition of Warner Bros Discovery’s board if shareholders elect directors aligned with Paramount’s approach.

Paramount has said it would use its proposed slate to exercise Warner Bros’ right under the Netflix merger agreement to engage in discussions with Paramount, potentially leading to a renegotiation of terms or a reevaluation of the competing offers.

Shareholders now face a pivotal decision as they weigh Paramount’s push for greater disclosure and board representation against the Warner Bros board’s recommendation to proceed with the Netflix merger.

The outcome of the tender offer expirations, proxy fight and potential bylaw changes will determine whether one transaction moves forward or if the conflict prompts further litigation and shareholder actions in the weeks and months ahead.