Paramount has filed a lawsuit against Warner Bros. Discovery which asks for more transparency regarding the latter’s agreement with Netflix after its bid to acquire company has been rejected.
Paramount Files Lawsuit Against Warner Bros. Discovery
Paramount CEO David Ellison shared a letter to the company’s shareholders which details the legal actions that the company took regarding their bid to purchase Warner Bros. Discovery.
The lawsuit was filed shortly Warner Bros. Discovery rejected its offer to purchase the entirety of the entertainment giant for $30 per share, an all-cash offer.
“Following the process prescribed under Delaware law, we filed suit this morning in Delaware Chancery Court to ask the court to simply direct WBD to provide this information so that WBD shareholders have what they need to be able to make an informed decision as to whether to tender their shares into our offer,” said Ellison.
According to Ellison, Warner Bros. Discovery has failed to disclose the details that they requested from the company. Particularly, he is referring to a customary financial disclosure.
“But in each of its 14D-9 filings, WBD has failed to include any disclosure about how it valued the Global Networks stub equity, how it valued the overall Netflix transaction, how the purchase price reduction for debt works in the Netflix transaction, or even what the basis is for its ‘risk adjustment’ of our $30 per share all-cash offer,” Ellison explained.
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Netflix, Warner Bros. Discovery Deal
Warner Bros. Discovery is staying firm on the original deal it has with Netflix and is looking forward to moving on with this transition with the entertainment and streaming giant, which has since faced disapproval from the industry.
Many entertainment companies and studios have since said that this Netflix-WBD deal would create a “vacuum” in the industry, considering their market share in various aspects of the business.
It is also known that White House officials have frowned upon Netflix’s acquisition of Warner Bros. Discovery, raising concerns about what it will do to the streaming industry and Hollywood.
It was even suggested that this deal may face scrutiny from the antitrust law as the size of Netflix’s market share in the streaming industry could get a significant boost after acquiring Warner Bros. Discovery and stifle competition along the way.
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