Warner Criticizes Paramount’s Rush as Court Hearing Approaches

Warner Bros. Discovery (WBD) has publicly criticized Paramount’s request for an expedited proceeding in the Delaware Chancery Court, labeling it as “an exercise in urgency theatre.” This motion arises as Paramount seeks WBD’s defense regarding its preferred deal with Netflix amid a contentious bidding war for Warner’s assets.

Key Developments in the Merger Battle

On January 21, Paramount has set a deadline for WBD stockholders to tender their shares in a hostile bid. The company claims that an expedited trial is necessary to compel WBD to disclose further information related to its stockholder actions. WBD countered that it is, in fact, Paramount that is soliciting immediate action from shareholders.

Warner Bros. Discovery’s Position

WBD emphasized that Paramount has the flexibility to extend its tender offer’s expiration, which the latter acknowledged. “This offer is neither Paramount’s ‘best and final’ nor capable of closing this year,” said a WBD spokesperson, highlighting that no other urgent issues necessitate the court’s intervention.

WBD plans to release a merger proxy that outlines the rationale behind its recommendation of the Netflix deal, including details on the value it presents and summaries from its financial advisors. The proxy will urge stockholders to support the Netflix acquisition during a yet-to-be-scheduled shareholder meeting.

Paramount’s Legal Stance

Paramount insists that shareholders require additional information to make an informed decision about tendering their shares. The legal dispute is set against the backdrop of ongoing financial challenges faced by Warner Bros. Discovery, including significant debt and decreased linear television viewership.

• Key Dates: Hearing scheduled for Thursday morning to consider Paramount’s motion.
• Paramount’s Offer: Proposes to acquire WBD for $30 per share in cash.
• Current Netflix Offer: Valued at $27.75 or includes $23.25 in cash and $4.50 in Netflix shares.

Future Implications

As pressure continues to mount, Netflix may also be considering an all-cash offer to strengthen its position in the ongoing negotiations. Meanwhile, the Ellison family intends to nominate directors sympathetic to Paramount’s interests at WBD’s annual meeting, further complicating the situation.

This merger battle underscores the strategic struggle not only for company control but also for the future direction of Warner Bros. Discovery amidst a rapidly evolving media landscape.