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Paramount Sues Warner Bros for information Barrons.com

Paramount Skydance is planning to nominate directors to the Warner Bros. Discovery board and has filed a lawsuit asking for more financial information as it ramps up its effort to persuade Warner shareholders to vote against the Netflix takeover deal and in favor of its own hostile bid.

Paramount CEO David Ellison wrote in a letter to investors on Monday that the company intends to nominate directors who will advise against the Netflix offer at an upcoming annual meeting.

"If WBD calls a special meeting ahead of its annual meeting to vote on the Netflix Agreement, Paramount will solicit proxies against such approval," Ellison added.

Paramount is still offering $30 a share and encouraging shareholders to tender their shares into its bid.

Paramount has also filed a suit in a Delaware court requesting Warner provide information related to how it valued its global networks business when it was weighing the rival bids. Netflix 's cash and stock offer values Warner's streaming and studios business at $27.75 a share, with the Discovery cable assets being spun out to investors. Paramount's offer is for all of Warner Bros. Discovery .

"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," Ellison wrote. He added that Paramount believes the Discovery shares would have "zero equity value."
Warner Bros. and Netflix didn't immediately respond to a request for comment from Barron's.

Warner last week rejected Paramount's latest amended offer, which included $40.4 billion in personal guarantees from Oracle founder Larry Ellison , who is David Ellison's father.

"The Board unanimously determined that...Paramount's latest offer remains inferior to our merger agreement with Netflix across multiple key areas," Samuel A. Di Piazza , Jr., chair of Warner's board of directors, said in a statement, adding that the offer Paramount made on Dec. 22 still included "an extraordinary amount of debt financing."

Warner shares dropped 1.4% to $28.48 on Monday. Paramount climbed 0.7% to $12.15 , and Netflix gained 0.8% to trade at $90.17 .