A Delaware judge has refused to accelerate Paramount Skydance’s lawsuit seeking additional disclosures tied to Warner Bros. Discovery’s proposed merger with Netflix, dealing a setback to Paramount’s attempt to disrupt the transaction on an expedited timeline.
Vice Chancellor Morgan Zurn of the Delaware Court of Chancery ruled Thursday that Paramount failed to demonstrate “cognizable irreparable harm,” rejecting its request to fast-track the case. Paramount had argued that Warner Bros Discovery’s disclosures were insufficient, particularly around its cable television assets, which are not included in Netflix’s proposed $82.7 billion cash-and-stock acquisition.
Zurn also noted that Paramount has other avenues to access the financial information it is seeking, even as she acknowledged that Paramount’s unsuccessful tender offer may have “opened the door wider” for Netflix’s deal to move forward.
Paramount, led by David Ellison, said it will continue pressing Warner Bros Discovery for additional transparency. “Warner Bros Discovery shareholders should ask why their board is working so hard to hide this information,” the company said in a statement.
Warner Bros Discovery dismissed the lawsuit as a distraction. “This is yet another unserious attempt, and the judge saw right through it,” the company said. Netflix declined to comment.
The legal battle is part of Paramount’s broader effort to derail Warner Bros Discovery’s agreement with Netflix and revive its own $108.7 billion hostile bid, which included a $30-per-share all-cash tender offer. Paramount had urged the court to act quickly so shareholders could evaluate its proposal before the offer’s January 21 expiration.
Warner Bros Discovery countered that the request was premature, stating it plans to disclose detailed financials when it formally solicits shareholder approval for the Netflix transaction. No shareholder vote has been scheduled, and Paramount is expected to extend its tender offer.
“This movie is still being shot,” Warner Bros Discovery attorney Ryan McLeod told the court. “It makes no sense for the court to shut down the set and make decisions based on incomplete facts.”
Meanwhile, Paramount is escalating pressure on the board. Earlier this week, the company announced plans to nominate directors to Warner Bros Discovery’s board and proposed bylaw changes that would require shareholder approval before spinning off its cable television business, including networks such as CNN and Food Network.
Paramount’s assets include CBS, MTV, Nickelodeon, and Paramount Pictures.
Warner Bros Discovery has maintained that it is not withholding material information and argued that the urgency surrounding the lawsuit is of Paramount’s own making. “The auction ended last year, and Paramount lost,” McLeod said.
The judge’s ruling leaves the Netflix deal on its existing timeline, while signaling that Paramount’s legal strategy faces a steep uphill climb as the battle for one of Hollywood’s largest media consolidations continues.
REELated:
WBD Board urges shareholders to reject Paramount offer
