Since it was announced that Netflix would be purchasing Warner Bros. Discovery, the David Ellison-led Paramount Skydance — which kicked off the bidding war for the studio in 2025 — has persisted in trying to get WBD to back down from the deal, submitting a hostile offer shortly after the agreement was revealed. It was reported that WBD was concerned about some of the components of Paramount's $30-per-share offer (approximately $108.4 billion overall), which is said to include financial backing from sovereign funds.
Paramount appeared to address some of the concerns expressed by Warner Bros., but nevertheless, WBD's board of directors formally rejected the offer. Now, the situation has escalated to an unexpected point. On Monday, Paramount Skydance sued WBD with the intention to get the latter to disclose financial information regarding its deal with the streaming giant. Ellison also sent out a letter to shareholders (posted in full by The Hollywood Reporter), detailing his commitment to seeing his tender offer go through.
As explained by Variety, the CEO expressed intentions to start a proxy fight. Further detailed by THR, Ellison plans to nominate his own slate of directors to vote against WBD's current agreement with Netflix:
"We are committed to seeing our tender offer through. We understand, however, that unless the WBD board of directors decides to exercise its right to engage with us under the Netflix merger agreement (the 'Netflix Agreement'), this will likely come down to your vote at a shareholder meeting. We do not know whether that will be at WBD's upcoming annual meeting or a special meeting. The 'advance notice' window for WBD's 2026 annual meeting opens in three weeks, and Paramount will nominate a slate of directors who, in accordance with their fiduciary duties, will exercise WBD's right under the Netflix Agreement to engage on Paramount's offer and enter into a transaction with Paramount. In addition, Paramount will propose an amendment to WBD's bylaws to require WBD shareholder approval for any separation of Global Networks. If WBD calls a special meeting ahead of its annual meeting to vote on the Netflix Agreement, Paramount will solicit proxies against such approval. These actions, coupled with our tender offer, ensure that you get the final decision on which offer is better for you."
Ellison further stated that Warner Bros. had avoided a deal with his company, but was unable to call Netflix's $82.7 billion offer "financially superior" to Paramount's:
"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. Our $30 per share in cash is simply more than Netflix's complex multi-variable consideration comprised of (a) $23.25 in cash plus (b) a number of Netflix shares currently worth $4.11 (at Friday's close) plus (c) the to-be-issued Global Networks equity which we have analyzed as having zero equity [sic] value1. In addition to not disclosing the value of the to-be-issued Global Networks spin off, WBD has not disclosed the mechanism by which any debt transferred from Global Networks to the Streaming & Studios segment reduces the cash and stock consideration payable to you."
Ellison also said that his goal in this latest effort is to seek an agreement that will best benefit WBD shareholders: "We do not undertake any of these actions lightly. Make no mistake, our goal remains to have constructive discussions with WBD's Board to reach an agreement that is in the best interests of WBD shareholders. Our objective from the moment we approached WBD was for a collaborative negotiation and a successful transaction that would be a win for both companies, both shareholder groups and all stakeholders."
The CEO then expressed disatisfaction and surprise at WBD not engaging in more serious talks with Paramount Skydance:
"We remain perplexed that WBD never responded to our December 4th offer, never attempted to clarify or negotiate any of the terms in that proposal, nor traded markups of contracts with us. Even as we read WBD's own narrative of its process, we are struck that there were few actual board meetings in the period leading up to the decision to accept an inferior transaction with Netflix. And we are surprised by the lack of transparency on WBD's part regarding basic financial matters. It just doesn't add up – much like the math on how WBD continues to favor taking less than our $30 per share all-cash offer for its shareholders."