Paramount has filed a lawsuit against Warner Bros. Discovery seeking information regarding its agreement with Netflix

Paramount has initiated legal proceedings against Warner Bros. Discovery (WBD) following a recent refusal of its amended offer by WBD's board. This lawsuit includes a demand for disclosure of the terms surrounding Netflix's proposed purchase of Warner Bros. assets.

In a recent development, Netflix revealed its intention to acquire Warner Bros, along with its gaming division, for a total of $82.7 billion. In response to this announcement, Paramount Skydance launched a bid aimed at taking over Warner Bros Discovery entirely. However, this attempt was quickly opposed by the board.

David Ellison, the CEO of Paramount, is urging the court to force WBD to provide necessary details regarding Netflix's acquisition agreement. This information is deemed crucial for WBD shareholders to decide on whether they should proceed with Paramount's offer.

Ellison criticized WBD's reluctance to finalize a deal with Paramount, stating that the financial terms of the Netflix deal are not superior to Paramount's proposal. In his correspondence addressed to Warner Bros. Discovery's shareholders, Ellison emphasized that Paramount's offer involves $30 per share in cash, contrasting with Netflix's offer, which includes cash and shares with additional conditions.

Paramount argues that WBD has not clarified certain aspects of the Netflix agreement, including the valuation of the Global Networks equity and the implications of debt reallocation affecting shareholder returns.

To address these concerns, Paramount has filed its case in the Delaware Chancery Court, requesting that WBD share the pertinent information with its shareholders.

Ellison expressed that these actions are a strategic move to encourage productive talks with WBD's Board and to reach a favorable resolution.

"The ideal scenario for shareholders and both companies is for WBD's Board to consider engaging with Paramount under the Netflix Agreement," Ellison stated. He assured that Paramount regards feedback from WBD's Board seriously and remains committed to negotiating appropriate resolutions.