A Delaware judge on Thursday rejected Paramount Skydance’s bid to expedite its lawsuit demanding more information from Warner Bros. Discovery about how that company decided Netflix’s proposed $72 billion takeover was better than its own $78 billion hostile bid.
Vice Chancellor Morgan Zurn of the Delaware Chancery Court said at a hearing that Paramount did not show it would suffer “cognizable irreparable harm” without the financial details it sought.
Warner Bros. rejected Paramount’s takeover offer on Jan. 7 and urged shareholders to approve the Netflix takeover.
Paramount wanted the court to fast-track the case so Warner Bros. shareholders could have access to financial details necessary to decide whether to accept its $30 per share all-cash tender offer, rather than Netflix’s lower cash-and-stock offer for its studio and streaming business, before it expires on Jan. 21.
Warner Bros. called Paramount’s request premature and said it plans to disclose the financials when it solicits shareholder approval for the Netflix takeover. No vote has been scheduled, and Paramount is expected to extend its tender offer.
“This movie is still being shot, and it makes no sense for the court to shut down the set and make decisions based on incomplete facts,” Warner Bros.’ lawyer Ryan McLeod told the judge during the hearing.
Paramount, Warner Bros. and Netflix did not immediately respond to requests for comment.
Paramount seeking board seats
The lawsuit is part of David Ellison-led Paramount’s effort to ratchet up pressure on Warner Bros., which operates film and television studios and has an extensive content library that includes Harry Potter and DC Comics.
Paramount said on Monday it also planned to nominate directors to Warner Bros.’ board, to push that body to “engage in negotiations with Paramount for the stockholders’ benefit.”
It also said it would propose changing Warner Bros.’ bylaws to require shareholder approval to break off that company’s cable TV business, including channels such as CNN and Food Network, as it had planned.
Paramount’s own businesses include CBS, MTV and Nickelodeon, as well as Paramount Pictures.
In its motion to expedite, Paramount said “time is of the essence,” and the number of tendered shares would be a factor in whether to extend the tender offer.
It also said more disclosure would ensure Warner Bros. shareholders would understand their rights.
Warner Bros. countered that the urgency was Paramount’s own creation, and Paramount’s motion should be deferred until after the proxy for the “premium, value-maximizing” Netflix merger is filed.
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