Economy

Paramount Skydance Files Lawsuit Against Warner Bros. Discovery Amid Hostile Takeover Bid

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Jan 12, 2026

THE BARE STORY

Paramount Skydance has filed a lawsuit against Warner Bros. Discovery (WBD) and its CEO, David Zaslav, in a Delaware court. The legal action is part of a hostile takeover attempt in which Paramount has offered $30 per share in cash for all of WBD’s assets. The filing comes after WBD’s board recently recommended that shareholders reject Paramount’s amended offer in favor of a competing deal.

In a letter sent to WBD shareholders on Monday, Paramount CEO David Ellison stated the company intends to launch a proxy fight by nominating directors for election to WBD’s board at its 2026 annual meeting. According to Ellison, the lawsuit seeks to compel WBD to release information regarding its sale process and its pending transaction with Netflix. Ellison alleged that WBD has failed to disclose how it valued the Netflix deal or the basis for its risk assessment of Paramount's offer.

The legal challenge arises following a December agreement in which WBD announced plans to sell its streaming and studio businesses, including HBO Max and the Warner Bros. film studio, to Netflix for $72 billion. Under that agreement, WBD intends to separate its cable TV channels into a new, publicly traded entity. WBD’s board has repeatedly advised shareholders to support the Netflix transaction over the Paramount bid.

Paramount began its acquisition attempts in the fall with unsolicited offers that were rejected. WBD previously cited concerns regarding the financial backing of Larry Ellison, the father of Paramount’s CEO, as a reason for opposing the deal. In response, Paramount submitted an amended offer addressing the handling of family trust assets, though the offer price was not increased. A WBD spokesperson did not immediately comment on the lawsuit.

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• Alleged lack of transparency in the sale process CEO David Ellison claims that WBD failed to properly disclose how it valued the pending transaction with Netflix or the basis for its risk assessment of Paramount's offer. The lawsuit filed in Delaware aims to compel WBD to release this specific information regarding its decision-making process.

• Determination to pursue leadership changes via proxy fight To advance its hostile takeover attempt, Paramount intends to nominate its own slate of directors for election to WBD’s board at the 2026 annual meeting. This strategic move supports their current bid to acquire all of WBD’s assets for $30 per share in cash.

• Adjustments made to address financial backing concerns In response to previous rejections, Paramount submitted an amended offer that specifically addressed the handling of family trust assets associated with Larry Ellison. This modification was designed to resolve the concerns WBD previously cited regarding the financial backing of the acquisition.

How it may affect me

As a U.S. reader:

If the board-backed deal proceeds, Netflix subscribers may gain access to HBO Max and Warner Bros. studios content as part of the proposed $72 billion acquisition.

The proposed Netflix agreement involves separating WBD cable channels into a new company, which could alter the structure and availability of linear television networks for viewers.

Shareholders face competing financial outcomes involving either a $30 per share cash payout from Paramount or a restructuring plan that sells streaming assets while spinning off cable operations.

Legal battles and a proposed proxy fight for the 2026 annual meeting indicate a prolonged period of uncertainty regarding the ownership and future direction of these media assets.

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