David Ellison Takes Warner Bros. to Court as Paramount Launches Proxy Battle Over Netflix Bid
Ellison's Paramount is suing for greater financial disclosures to Warner Bros. shareholders. Paramount is upping its fight for Warner Bros. Discovery.
In a letter to WBD shareholders Monday, Paramount CEO David Ellison said his company has filed suit against WBD in Delaware seeking greater financial disclosure of the Netflix deal. Additionally, Ellison said his company plans to nominate its own slate of directors for WBD’s board who they believe would vote against the deal with Netflix.
After repeated attempts, Paramount has stuck with its $30 per share tender offer for Warner Bros. Discovery and has argued that its all-cash bid remains “superior” to the deal that WBD signed with Netflix. WBD’s board rejected Paramount’s latest bid, which included a personal guarantee from Oracle founder Larry Ellison, saying that it still did not address all their concerns.
Warner Bros. struck a deal with Netflix in December that would see the streamer acquire its TV and movie studios for $83 billion.
In the letter Monday, Ellison argues that there is a “customary financial disclosure a board is supposed to provide shareholders when making an investment recommendation.” But he argues that Warner Bros. has failed to provide these disclosures, including how it valued the overall Netflix transaction and the basis for the “risk adjustment” of Paramount’s offering. He’s filing the suit to compel WBD to provide that information to its shareholders.
Because Paramount’s offers thus far have been rebuffed, Ellison wrote that the decision will likely come down to votes at the shareholder meeting. While he writes that he does not know whether that will be at the WBD annual meeting or a special meeting, Paramount plans to nominate its own slate of directors. Additionally, Paramount “will propose an amendment to WBD’s bylaws to require WBD shareholder approval for any separation of Global Networks.”
