Paramount Skydance Corp. Stated that Warner Bros. Discovery Inc. Is not conducting its self-sale process equitably and is not prioritizing its shareholders' welfare, amidst an ongoing competitive auction.
TL;DR
- Paramount claims Warner Bros. Discovery is not running a fair sale process, favoring Netflix.
- Paramount has submitted five bids but alleges WBD is ignoring them for a competing Netflix proposal.
- Paramount urges WBD to establish a special committee to ensure a fair and unbiased sale.
- Warner Bros. stated its board is fulfilling its fiduciary obligations with utmost care and attention.
Paramount's legal representatives informed Warner Bros. CEO David Zaslav via correspondence that the major entertainment firm is giving preference to a competing proposal from Netflix Inc., despite Paramount having put forth five bids.
“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 favors a single bidder,” according to the letter, which was published earlier by CNBC.
Paramount is inquiring whether Warner Bros. Established a special committee composed of impartial board members to guide the sale proceedings and evaluate proposals.
“If not, we strongly urge you to empower such a special committee comprised of directors with no potential appearance of bias or beholdenness to others whose interests may differ from those of the stockholders,” the letter reads. “This would seem to be an important step at this stage, to ensure the fairness and unimpeachability of the transaction process and to maximize the value of whatever outcome WBD determines to pursue.”
Paramount said it believes that the sales process has been “tainted” by management conflicts, including “certain members of management’s potential personal interests in post-transaction roles and compensation as a result of the economic incentives embedded in recent amendments to employment arrangements.”
In response, Warner Bros. Said it had shared the Paramount letter with its board.
“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,” Warner Bros. Said.
A spokesperson for Paramount declined to comment.
Netflix's proposal primarily involves cash and reportedly exceeds Paramount's offer, according to Bloomberg. On December 1st, three media firms submitted their second round of formal bids. Warner Bros.' Leadership has been evaluating these proposals and engaging in talks with the interested parties. A definitive choice is anticipated within the next few days.
Warner Bros. Officially put itself up for sale in October after receiving offers from Paramount. It has attracted bids from Paramount, Netflix and Comcast Corp. Paramount is the only company bidding for all of Warner Bros., including cable-TV networks like CNN and TNT. Netflix and Comcast are only bidding for the Warner Bros. Film and TV studios and its HBO Max streaming service.
