Paramount Skydance is seeking to gain control of Warner Bros Discovery by nominating directors to vote against its deal with Netflix at the company's upcoming board meeting. The entertainment giant has planned to nominate its own slate of directors in an effort to derail the $82.7 billion (£61.4 billion) agreement, which would see Netflix take control of key assets such as Warner Bros and HBO.
Paramount is using a tactic known as a proxy fight, where it aims to convince enough investors to cast their votes in favour of its nominees and replace existing directors proposed by the board. The move is an attempt to challenge WBD's planned takeover by Netflix, which has been backed by Larry Ellison's $40 billion personal guarantee.
The dispute centres around Paramount's $108.4 billion offer for WBD, which includes a global networks business valued at zero. However, the streaming giant offers only $23.25 per share in cash and stock, plus equity in the spin-off of the global networks operation. Paramount argues that its cash-and-share deal is more beneficial to shareholders, but WBD's board has rejected the offer twice, citing it as "inadequate".
In a letter to investors, David Ellison, Paramount's CEO, stated that his company would engage with WBD to assess its takeover bid and proposed an amendment to the bylaws requiring shareholder approval for the spin-off of the global networks business. If WBD calls a special meeting ahead of its annual meeting, Paramount plans to solicit proxies against approving the Netflix agreement.
The standoff has raised concerns over the risks associated with the LBO (leveraged buyout) structure of Paramount's bid, which poses significant liabilities and costs for WBD if it were to walk away from the deal. If accepted, WBD would have to pay a $2.8 billion breakup fee to Netflix, as well as additional costs including interest on debt and a $1.5 billion fee for failing to complete a debt exchange.
As the battle for control of Warner Bros Discovery continues, it remains to be seen whether Paramount's proxy fight will succeed in blocking the deal with Netflix or if WBD shareholders will ultimately back the streaming giant's bid.
Paramount is using a tactic known as a proxy fight, where it aims to convince enough investors to cast their votes in favour of its nominees and replace existing directors proposed by the board. The move is an attempt to challenge WBD's planned takeover by Netflix, which has been backed by Larry Ellison's $40 billion personal guarantee.
The dispute centres around Paramount's $108.4 billion offer for WBD, which includes a global networks business valued at zero. However, the streaming giant offers only $23.25 per share in cash and stock, plus equity in the spin-off of the global networks operation. Paramount argues that its cash-and-share deal is more beneficial to shareholders, but WBD's board has rejected the offer twice, citing it as "inadequate".
In a letter to investors, David Ellison, Paramount's CEO, stated that his company would engage with WBD to assess its takeover bid and proposed an amendment to the bylaws requiring shareholder approval for the spin-off of the global networks business. If WBD calls a special meeting ahead of its annual meeting, Paramount plans to solicit proxies against approving the Netflix agreement.
The standoff has raised concerns over the risks associated with the LBO (leveraged buyout) structure of Paramount's bid, which poses significant liabilities and costs for WBD if it were to walk away from the deal. If accepted, WBD would have to pay a $2.8 billion breakup fee to Netflix, as well as additional costs including interest on debt and a $1.5 billion fee for failing to complete a debt exchange.
As the battle for control of Warner Bros Discovery continues, it remains to be seen whether Paramount's proxy fight will succeed in blocking the deal with Netflix or if WBD shareholders will ultimately back the streaming giant's bid.
paramount is trying to game the system by getting its own directors on the board who'll vote against the netflix deal 
but it's all so predictable... wbd's just stuck in a losing battle and we're the ones who are gonna foot the bill 
and paramount's trying to pawn off its own liabilities onto wbd like it's some kind of gotcha moment 
but we all know the truth - this whole thing is just a mess
and the shareholders are just pawns on the board... oh wait, they're not even in control 
. So Paramount's trying to use a proxy fight tactic to block Netflix's takeover of Warner Bros Discovery? Like, what's next? They're basically trying to buy their way into control 
. I don't know what's more ridiculous, Paramount's offer or Netflix's guarantee from Larry Ellison 
. This whole thing is just a big mess, and I'm not sure who's going to come out on top 
i mean what's going on with these billionaires and their money? it feels like they're all just trying to one-up each other. david ellison from paramount is like the ultimate underdog, right? proposing an amendment to the bylaws to get shareholder approval for that spin-off of the global networks business... sounds like a whole lot of hubris to me 
. Maybe we should just sit back and watch this drama unfold? 
and if wbd wins this battle, they'll have some major leverage over netflix... 
let's keep an eye on this one, folks! 
And I'm low-key rooting for Netflix here 
But let's be real, WBD shareholders deserve some better than this proxy fight nonsense 
Can we just get to the bottom of this already? 
anyway, this whole thing is super complicated so i'm just gonna sit back relax and watch how it all plays out 
and soliciting proxies from shareholders 
it's like a game of corporate chess where the stakes are huge 