Warner Criticizes Paramount’s Push to Expedite as ‘Urgency Theatre’ Ahead of Hearing
Warner Bros. Discovery (WBD) has criticized Paramount’s request for an expedited hearing in Delaware Chancery Court, labeling it an “exercise in urgency theatre.” This statement comes as Paramount seeks to pressure WBD into disclosing information regarding its agreement with Netflix amidst an ongoing hostile bid.
Context of the Dispute
Paramount, led by David Ellison, aims to expedite proceedings to bolster its rival offer to WBD shareholders. The company filed a lawsuit requesting extensive documentation to support its claims. Paramount established a deadline of January 21 for WBD stockholders to consider its tender offer.
Warner’s Response
Warner claims that the urgency claimed by Paramount is unfounded. “Paramount has launched a hostile tender offer but has the flexibility to extend its expiration date,” a WBD spokesperson stated. They emphasized that Paramount’s offer is not its final or best proposal and may not close within the year.
Upcoming Proxy and Recommendations
The Warner Bros. merger proxy aims to clarify its board’s rationale for endorsing the Netflix transaction. It will detail:
- The value offered by the Netflix deal
- Summaries of financial advisors’ work
- Fairness opinions from financial experts
WBD intends to recommend that shareholders vote in favor of the Netflix agreement in an upcoming meeting, though a date has not yet been established.
Legal Developments
Warner highlighted that Paramount’s motion is premature and should await the merger proxy filing. They described the situation as a hostile acquirer seeking leverage over WBD during an active contest for control.
Paramount’s Justification
In contrast, Paramount argues that shareholders require more information to make informed decisions. The hearing to discuss the expedited proceedings has been scheduled for Thursday, presided over by Vice Chancellor Morgant T. Zurn.
Market Implications
The ongoing merger battle remains dynamic, with WBD struggling under financial burdens related to debt and declines in traditional television. Nevertheless, recent accolades, such as a successful Golden Globes showing, highlight WBD’s status as a formidable production entity.
In December, WBD made headlines by agreeing to sell its studios and streaming assets to Netflix. A significant element of the ongoing conflict is Ellison’s intentions to nominate directors aligned with Paramount at WBD’s upcoming annual meeting, further complicating the Netflix deal.
Current Offer Details
Currently, Netflix’s deal stands at $27.75 per share for Warner Bros. businesses, comprising $23.25 in cash and $4.50 in Netflix stock. Paramount has contended that a cash offer is more straightforward and favorable for shareholders.
