Paramount Skydance sues Warner Bros. Discovery in hostile takeover attempt

Paramount Skydance has filed a lawsuit seeking more information from Warner Bros. Discovery as it continues to push its hostile offer to take over the media and entertainment company.

In a letter to WBD shareholders on Monday Paramount CEO David Ellison said a lawsuit was filed in the Delaware Chancery Court asking the court "to simply direct WBD to provide this information so that WBD shareholders have what they need to be able to make an informed decision as to whether to tender their shares into our offer."

The lawsuit comes less than a week after WBD's board once again recommended that shareholders reject Paramount's latest amended offer.

A WBD spokesman didn't immediately respond to comment.

Warner Bros. Discovery last month agreed to sell its streaming and studio business to Netflix for $72 billion. The proposed deal was the result of a sale process in which Paramount was bidding for all of WBD's assets, including its portfolio of cable TV channels, known as Discovery Global.

As part of the Netflix deal Warner Bros. Discovery plans to separate Discovery Global into its own publicly traded entity.

Soon after reaching a deal with Netflix, Paramount went public with its hostile offer. Paramount has offered $30 per share, all cash for all of Warner Bros. Discovery's assets.

WBD's board told shareholders in December to reject the initial offer in favor of Netflix after concerns about the backing of Ellison's father, billionaire Larry Ellison. Paramount responded with an amended offer in which the Oracle co-founder agreed not to revoke the family trust or adversely transfer its assets during a pending transaction.

Paramount has stopped short of increasing the size of its bid, however.

"WBD has failed to include any disclosure about how it valued the Global Networks stub equity, how it valued the overall Netflix transaction, how the purchase price reduction for debt works in the Netflix transaction, or even what the basis is for its "risk adjustment" of our $30 per share all-cash offer," Ellison said in the letter on Monday.

Ellison added that WBD shareholders need this information in order to decide on Paramount's offer.

Paramount's pursuit of Warner Bros. Discovery began in the fall when the company made three offers that were rejected. Warner Bros. Discovery then opened up a sale process seeking offers for some or all of its company.

The move had come after Warner Bros. Discovery earlier in the year said it planned to split its company into two publicly traded entities -- Warner Bros., consisting of the streaming platform HBO Max and film studio, and Discovery Global, comprised of the pay TV networks like TNT and CNN.

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