Paramount Accuses Warner Bros of Hiding Key Details of Its Netflix Deal… Now It’s Suing

Shares of Warner Bros are back under pressure (-1.63%) after Paramount Skydance escalated its takeover effort by filing suit against the company and CEO David Zaslav.

The lawsuit, filed Monday in Delaware Chancery Court, comes just days after Warner Bros board once again recommended that shareholders reject Paramount’s amended $30-per-share all-cash offer. Paramount also notified shareholders that it intends to nominate directors at WBD’s 2026 annual meeting, setting the stage for a proxy fight.

In a letter to shareholders, Skydance CEO David Ellison said the legal action is aimed at forcing Warner Bros to disclose more detail around its sale process and its recently announced $72 billion transaction with Netflix.

Specifically, Paramount argues that WBD has failed to adequately explain how it valued the Netflix deal, how it calculated debt adjustments, and how it assessed the value of what remains of the company after selling its streaming platform and studio assets. Ellison said shareholders are being asked to make a decision without access to critical financial assumptions.

“We filed suit to ask the court to simply direct WBD to provide this information so that shareholders can make an informed decision,” Ellison wrote.

The dispute centers on Warner Bros’ agreement last month to sell HBO Max and the Warner Bros. film studio to Netflix for $72 billion. Under the proposed structure, WBD plans to separate its remaining cable-focused business, Discovery Global, into a standalone publicly traded company.

Paramount, by contrast, has offered to acquire all of Warner Bros’ assets for $30 per share in cash. The company has repeatedly argued that its proposal is superior to the Netflix transaction and that the sale process favored Netflix at the expense of other bidders.

WBD’s board has consistently disagreed. In December, it urged shareholders to reject Paramount’s initial offer, citing deal certainty concerns and questions surrounding financing tied to Ellison’s father, Oracle founder Larry Ellison. Paramount responded with an amended offer in which the Ellison family trust agreed not to revoke or materially transfer assets during a potential transaction.

Notably, Paramount did not raise its bid price.

This latest escalation follows months of back-and-forth. Paramount Skydance made three unsolicited offers beginning in the fall, all of which were rejected. Warner Bros’ then initiated a broader sale process that ultimately resulted in the Netflix agreement. Paramount went public with its hostile bid shortly after that deal was announced.

For Warner Bros shareholders, the situation now presents a choice they’ll have to make. Accept management’s recommendation to proceed with the Netflix transaction and corporate split, or side with Paramount’s view that a full cash buyout offers better value.

As with many contested deals, the outcome may ultimately hinge on whether Paramount is willing to improve its offer.

At the time of publishing this article, Stocks.News holds positions in Netflix as mentioned in the article.