Paramount Skydance filed a lawsuit in Delaware Chancery Court on Monday and announced plans to nominate its own slate of directors to Warner Bros. Discovery’s board.
The lawsuit came as part of an escalating hostile campaign to force the company to disclose information shareholders need to evaluate competing takeover proposals and derail Netflix’s $82.7 billion merger agreement.
The legal manoeuver marks a dramatic shift from deal-making to courtroom combat in one of Hollywood’s fiercest M&A battles.
Paramount sues WBD: The proxy fight strategy
Paramount’s Delaware lawsuit specifically asks the court to compel Warner Bros. to provide shareholders with a detailed financial analysis.
It demands disclosure documents that the company claims are essential for informed decision-making on the two competing offers.
In a letter to WBD shareholders on Monday, Paramount CEO David Ellison stated that the lawsuit seeks to “simply instruct WBD to furnish this information, enabling WBD shareholders to make an informed choice regarding whether to accept our offer.”
The legal filing works in tandem with Paramount’s aggressive proxy strategy.
The company announced it will nominate a slate of directors ahead of Warner Bros. Discovery’s 2026 annual meeting, with the “advance notice” window opening in three weeks.
These director nominees, Paramount stated, will exercise their fiduciary duties by negotiating with Paramount and potentially unwinding the Netflix deal under the merger agreement’s existing termination provisions.
Paramount also said it plans to propose an amendment to WBD’s bylaws requiring shareholder approval for any spin-off of Global Networks, the cable division being separated before the Netflix transaction closes.
The manoeuver would give shareholders a second lever to block or delay the Netflix deal.
Additionally, if WBD calls a special shareholder meeting to vote on Netflix’s agreement before the annual meeting, Paramount will solicit proxies against approval.
The economic and strategic stakes
The financial gap between the two proposals remains stark.
Paramount is offering $30 per share in all-cash for the entire Warner Bros. Discovery company, valuing it at $108.4 billion.
Netflix is paying $27.75 per share: $23.25 in cash plus $4.50 in Netflix stock, for only Warner Bros.’ studios, HBO Max, and HBO, valued at $82.7 billion in total enterprise value.
The Netflix deal excludes WBD’s cable networks, which will be spun into a separate company called Discovery Global.
The valuation gap, however, obscures deeper structural concerns.
WBD’s board has questioned the financing credibility of Paramount’s bid, particularly regarding the Ellison family’s financial backstop.
Netflix countered with a $5.8 billion breakup fee if the deal fails due to regulatory issues, higher than Paramount’s $5 billion commitment, signaling confidence in regulatory approval.
The court is unlikely to issue an immediate decision on disclosure, but a judge could accelerate the timeline if WBD resists transparency.
Paramount’s director nominations, once formally filed with the SEC, will trigger a proxy fight at the annual meeting, likely scheduled for early summer 2026.
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