Paramount Skydance has accused Warner Bros. Discovery’s (WBD) sales process of being “tilted and unfair”, as Netflix (NASDAQ: NFLX) emerges as the leading contender to buy WBD’s assets.
The letter Paramount Skydance sent to WBD alleges that it resisted Paramount’s offer to buy the company outright amid European regulators' concerns about media consolidation, and that WBD’s management has been enthusiastic about Netflix’s bid.
“It has become increasingly clear, through media reporting and otherwise, that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders, and embarked on a myopic process with a predetermined outcome that favours a single bidder,” wrote Paramount Skydance.
Paramount Skydance also claimed that the bidding was impacted by management members’ personal interest in roles and compensation after a sale. It called for WBD to appoint an independent special committee of board members to consider bids.
“We must insist on assurances and steps taken to ensure that a truly fair and independent process is being conducted, both for Paramount’s benefit and in the interest of WBD’s stockholders,” Paramount Skydance wrote.
WBD told Paramount it had received the letter and would share it with board members, CNBC reported. “Please be assured that the WBD Board attends to its fiduciary obligations with the utmost care, and that they have fully and robustly complied with them and will continue to do so,” WBD said in its response to the letter.
WBD has accepted two rounds of bidding from Paramount Skydance, which aims to buy all its assets, as well as from Netflix and Comcast, who would only acquire WBD’s film studio and streaming businesses.
A third round of bidding is reportedly due today, with a winner likely to be announced next week. Netflix’s mostly-cash offer is the highest, per Reuters.
While WBD initially planned to split the company into two to relieve its ongoing debt issues, it opened up bidding in October after turning down three acquisition offers from Paramount Skydance.
Paramount Skydance’s (NASDAQ: PSKY) shares closed at US$14.82, up from its previous close at $14.67. Its market capitalisation is $15.88 billion.
Warner Bros. Discovery’s (NASDAQ: WBD) shares closed at $24.54, down from its previous close at $24.57. Its market capitalisation is $60.81 billion.
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