Warner Calls Paramount’s Motion To Expedite “An Exercise In Urgency Theatre” As Court Hearing Set
Warner Bros. Discovery responded today to Paramount’s motion for an expedited proceeding in Delaware Chancery Court, calling it “an exercise in urgency theatre—ringing a fire alarm in the absence of any flames or even smoke.”
The David Ellison company wants WBD to defend its chosen deal with Netflix over Paramount’s rival hostile bid and filed a suit demanding copious documentation. It also asked the judge to expedite the proceeding ahead of a Jan. 21 deadline Paramount has set for WBD stockholders to tender their shares.
“Paramount contends that an expedited trial is needed to compel WBD to disclose more because the board requests stockholder action, but it is Paramount—not WBD—that is asking stockholders to act now,” said Warner. “Paramount has launched a hostile tender offer and set its own expiration date of January 21, yet Paramount has the unilateral and unfettered ability to extend that expiration, and it admits that this offer is neither its “best and final” nor even possible of closing any time this year. No other urgency is identified, and none exists.”
Warner said its upcoming merger proxy “will explain in detail the WBD board’s reasons for its recommendation that stockholders support the Netflix transaction, including by making additional disclosure about the value offered by the transaction and full summaries of the work of WBD’s financial advisors, along with their fairness opinions.” The proxy will recommend stockholders vote in favor of the Netflix deal at a shareholder meeting, which hasn’t yet been scheduled.
“Paramount’s motion is premature and should be deferred pending the filing of the Netflix merger proxy,” WBD said, describing the dynamic at play as “a would-be hostile acquirer seeking to use this Court as its backdoor into the boardroom to peer over the shoulders of directors during a live contest for control.”
Paramount says shareholders cannot make an informed decision on whether to tender their shares without more to go on.
Vice Chancellor Morgant T. Zurn has set a hearing for Thursday morning to consider Paramount’s motion to expedite.
The Delaware detour is one of a few new developments in the ongoing merger battle between the Ellison family and the world’s biggest streamer for control of Warner. The company has been struggling under debt and linear television declines. But, as its Golden Globes sweep just illustrated, is a true production powerhouse.
WBD agreed to sell its studios and streaming assets to Netflix last month and has twice advised shareholders to reject Paramount’s hostile offers to acquire all of WBD for $30 a share in cash. Ellison will nominate a slate of sympathetic-to-Paramount directors for election at WBD’s annual meeting in a further attempt to derail the Netflix deal.
As pressure mounts, Netflix, meanwhile, is said to be considering shifting its cash-and-stock deal to all cash. It’s currently offering $27.75 for the Warner Bros. businesses, or $23.25 in cash and $4.50 in Netflix shares. As Paramount has argued repeatedly, cash is cleaner.
