Paramount Skydance sues Warner Bros for details on Netflix deal

Jan 12 (Reuters) – Paramount Skydance on Monday sued Warner Bros Discovery for more information on a rival $82.7 billion deal with Netflix, escalating a battle to take control of one of the most storied Hollywood studios. The David Ellison-led company also said it plans to nominate directors to Warner Bros Discovery's board, in one of its most aggressive steps yet to convince shareholders that its hostile $30-per-share cash bid is superior to the $27.75-per-share cash-and-stock offer from Netflix. The CBS parent and Netflix have been in a heated battle for Warner Bros, its prized film and television studios, and its extensive content library that includes "Harry Potter" and the DC Comics universe. In a letter to shareholders, Paramount also said it would propose an amendment to Warner Bros' bylaws that would require shareholder approval for any separation of the media giant's cable TV business – which is key to the Netflix deal. Paramount said last week the value of the cable spinoff was virtually worthless and reiterated its amended $108.4 billion bid after another rejection from the Warner Bros board. The amended offer had included $40 billion in equity personally guaranteed by Oracle's co-founder Larry Ellison, the father of Paramount CEO David Ellison, and $54 billion in debt. "WBD has provided increasingly novel reasons for avoiding a transaction with Paramount, but what it has never said, because it cannot, is that the Netflix transaction is financially superior to our actual offer," Paramount wrote in a letter to Warner Bros shareholders. "Unless the WBD board of directors decides to exercise its right to engage with us under the Netflix merger agreement, this will likely come down to your vote at a shareholder meeting." Netflix and Warner Bros did not immediately respond to requests for comment. Shares of Warner Bros were down 1.5% in early trading, while Netflix ticked up 0.8% and Paramount 0.3%. Paramount's argument – one it is using to sway investors – is that its all-cash offer for the whole of Warner Bros offers more certainty than the deal with Netflix for the studios and streaming assets and will more easily clear regulatory hurdles. The sour performance of Versant, the Comcast cable spinoff, has also given fresh ammunition to Paramount's campaign to convince Warner Bros shareholders its offer is better. Paramount's tender offer will expire on January 21, but the company can extend it. (Reporting by Aditya Soni and Deborah Sophia in Bengaluru; Editing by Tasim Zahid and Sriraj Kalluvila)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)