A Delaware judge on Thursday denied Paramount Skydance’s attempt to fast-track its lawsuit demanding Warner Bros. Discovery release details about its deal with Netflix.
Earlier this week, Paramount filed a lawsuit seeking to force Warner Bros. to disclose info about its proposed merger with Netflix, specifically how WBD values the spin-off of its cable assets – a key part of the Netflix deal that Paramount has argued would be virtually worthless.
The David Ellison-led conglomerate asked the judge to expedite the process by next Wednesday, when its own tender offer for WBD is slated to expire.
Delaware Chancery Court Judge Morgan Zurn said Paramount did not suffer “cognizable irreparable harm” from WBD’s alleged lack of disclosures, adding that there are other ways to obtain the information it’s seeking.
Paramount wanted the court to speed up its case so Warner Bros. shareholders could decide whether to accept its $30-per-share, all-cash tender offer for all of the media conglomerate – which Paramount has argued is superior to Netflix’s lower cash-and-stock takeover of just the studio and streaming business.
In a statement to The Post, WBD – the board of which recently rejected Paramount’s $78 billion hostile bid – called the lawsuit “yet another unserious attempt,” adding that it was pleased the judge “saw right through it.”
Paramount retorted that “shareholders should ask why their board is working so hard to hide this information,” adding that it plans to extend its tender offer beyond Jan. 21.
Netflix declined to comment.
During Thursday’s court session, lawyers for Paramount, also known as PSKY, said WBD is acting like an “ostrich with its head in the sand” – completely ignoring the tender offer so it can move forward with the Netflix deal.
That’s the type of “inequitable thumb on the scale” that Delaware law seeks to block, PSKY’s team argued.
Lawyers for WBD shot back that the alleged urgency in Paramount’s lawsuit is of its own creation, adding that this “movie is still being shot, and it makes no sense for the court to shut down the set.”
The company said it plans to disclose the financials requested by Paramount when it solicits shareholder approval of the Netflix tender offer.
“The auction ended last year, and Paramount lost,” Warner’s lawyers added.
Paramount would likely have to keep extending its tender offer “well into next year,” since checking off regulatory roadblocks could take 12 to 18 months, WBD said.
Paramount has stuck by its $78 billion hostile bid for the entirety of WBD, arguing it’s better than Netflix’s $72 billion takeover of just the studio and streaming business.
Meanwhile, Netflix is reportedly considering turning its $27.75 cash-and-stock tender offer into an all-cash one – plagued by its falling share price as investors grow concerned about the stock portion of the bid, The Post previously reported.
A shift to 100% cash could prompt a new counteroffer from Paramount, sparking an all-out bidding war for control of WBD – which owns HBO, HBO Max and a huge content library including Harry Potter and DC Comics, The Post reported.
Paramount has previously been reluctant to hike its offer. Instead, it has argued that shareholders should reject Netflix’s offer because it hinges on the spin-off of WBD’s cable assets in a volatile stock market – nodding to Comcast’s Versant spin-off, which was pummeled during its market debut.
