By Jonathan Stempel and Dawn Chmielewski Jan 15 (Reuters) – A Delaware judge on Thursday rejected Paramount Skydance's bid to speed up its lawsuit demanding that Warner Bros Discovery better explain its decision that Netflix's proposed $82.7 billion takeover was better than Paramount's own $108.7 billion hostile bid. Vice Chancellor Morgan Zurn of the Delaware Chancery Court said Paramount did not suffer "cognizable irreparable harm" from Warner Bros' alleged inadequate disclosures about its cable TV business, which is not part of the Netflix bid. She also said Paramount had other means to obtain financial information it sought, though an unsuccessful Paramount tender offer for Warner Bros "opens the door wider" for the Netflix transaction. Paramount said in a statement it will keep pressing Warner Bros for better disclosures. "Warner Bros Discovery shareholders should ask why their board is working so hard to hide this information," Paramount said. In a statement, Warner Bros called the lawsuit "yet another unserious attempt to distract and the judge saw right through it." Netflix did not immediately respond to requests for comment. The lawsuit was part of David Ellison-led Paramount's effort to ratchet up pressure on Warner Bros, which operates film and television studios, owns HBO and has an extensive content library that includes Harry Potter and DC Comics. Paramount wanted the court to fast-track the case so Warner Bros shareholders could decide whether to accept its $30 per share all-cash tender offer, rather than Netflix's lower cash-and-stock offer for its studio and streaming business, before it expired on January 21. Warner Bros called Paramount's request premature and said it plans to disclose the financials when it solicits shareholder approval for the Netflix takeover. No vote has been scheduled, and Paramount is expected to extend its tender offer. Warner Bros rejected Paramount's takeover proposal on January 7. "This movie is still being shot, and it makes no sense for the court to shut down the set and make decisions based on incomplete facts," Warner Bros' lawyer Ryan McLeod said during the hearing. PARAMOUNT SEEKING BOARD SEATS Paramount said on Monday it planned to nominate directors to Warner Bros' board, to push that body to negotiate. It also proposed changing Warner Bros' bylaws to require shareholder approval to break off the cable TV business, including channels such as CNN and Food Network. Paramount's own businesses include CBS, MTV and Nickelodeon, as well as Paramount Pictures. At Thursday's hearing, Paramount's lawyer Michael Barlow accused Warner Bros' board of pretending the tender offer didn't exist, so the board could proceed with the Netflix takeover. "It's the kind of inequitable thumb on the scale that Delaware law rejects," he said. Warner Bros countered that it didn't believe it was withholding material information, and the urgency was Paramount's own creation. It said Paramount's motion should be deferred until after the proxy for the "premium, value-maximizing" Netflix merger is filed. "The auction ended last year, and Paramount lost," McLeod said. McLeod also said Paramount would likely have to extend its tender offer "well into next year," because signing a merger agreement and winning regulatory clearances could take 12 to 18 months. (Reporting by Jonathan Stempel in New York and Dawn Chmielewski in Los Angeles; Editing by Sharon Singleton and Nick Zieminski)
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