A Delaware judge has thrown out Paramount’s lawsuit seeking to extract further details around how Warner Bros Discovery (WBD) chose Netflix’s $82.7bn bid for its streaming and studios business.
Judge Morgan T. Zurn of Delaware Chancery Court dismissed arguments that Paramount would suffer “irreparable harm” if the WBD board did not reveal more information.
The WBD board previously rejected Paramount’s hostile $108bn all-cash bid for the entirety of WBD. Paramount CEO David Ellison asked the court to expedite disclosure of financial details, including the valuation of WBD’s Discovery Global spin-off housing the cable networks, which will be run by WBD COO Gunnar Wiedenfels. Paramount argues WBD shareholders need this information as they weigh up the bids.
Paramount officers reportedly said outside the court on Thursday that they are likely to extend the self-imposed January 21 deadline by when their offer would expire.
A Paramount spokesperson said on Thursday morning: “Today’s ruling (by the Honorable Morgan T. Zurn) was based on Paramount’s standing and does not pertain to the merits of Paramount’s claim. WBD shareholders need the information on the WBD Board’s evaluation of the Global Networks stub equity and the “risk adjustments” performed on Paramount’s offer to make an informed decision.
“WBD shareholders should ask why their board is working so hard to hide this information. Paramount continues to urge WBD to make these disclosures so that WBD shareholders can make an informed decision.”
In its own statement, WBD said: “Today’s lawsuit by Paramount Skydance was yet another unserious attempt to distract and the Judge saw right through it. We are pleased a Delaware Court agreed with our belief and rejected the notion that this lawsuit needed special treatment and may have other serious flaws. Despite its multiple opportunities, Paramount Skydance continues to propose a transaction that our board unanimously concluded is not superior to the merger agreement with Netflix.”
This week it emerged that Netflix is reportedly considering a switch from its cash and stock offer to an all-cash bid, which in some cases can result in a swifter path to a merger.
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