Judge Rejects Paramount’s Fast-Track Request in Warner Merger Dispute

A Delaware Chancery Court judge has denied Paramount’s request for expedited disclosure in its ongoing dispute with Warner Bros. Discovery (WBD) regarding a hostile tender offer. Chancellor Morgant T. Zurn ruled that Paramount failed to demonstrate any “irreparable harm” as a shareholder in WBD that would warrant urgent disclosure.

Details of the Ruling

According to Chancellor Zurn, Paramount as a stockholder must show it would suffer cognizable harm, which it did not. The ruling was made after a hearing where Paramount sought accelerated access to information about WBD’s recommendation against accepting its tender offer.

Statements from Paramount and WBD

• Paramount stated that the judge’s ruling pertained to its standing, not the substance of its claims.
• WBD characterized the lawsuit as an “unserious attempt” by Paramount to distract from the main issues.

Paramount’s offer comes with a deadline of January 21 for shareholders to tender their stocks. This date was set by Paramount and has already been extended once. Counsel for Paramount acknowledged that it may be extended again but did not provide a new date during the hearing.

Key Points of the Dispute

Paramount seeks key details regarding the evaluation of WBD’s Discovery Global spinoff. This information is crucial for WBD shareholders to assess which offer is in their best interests.

• WBD plans to provide more comprehensive disclosure in its upcoming Netflix merger proxy statement.
• Chancellor Zurn clarified that Paramount is not in a position to dictate the timeline for these disclosures.

Alternate Plans and Proxy Fight

Besides its legal actions, Paramount is preparing to propose an alternative slate of directors for WBD’s upcoming annual meeting, signaling a potential proxy fight. The timeline for this action will open in approximately three weeks.

Paramount currently offers $30 per share for WBD, in contrast to Netflix’s proposal of $23.25 in cash and $4.50 in Netflix shares. WBD’s plans involve spinning off linear television assets into a new publicly traded company, Discovery Global.

The hearing concluded with both sides confident in their positions, but the path forward remains complex as Paramount seeks to balance its offer and shareholder interests against WBD’s existing agreements.