David Ellison and Paramount will proceed to battle for Warner Bros. Discovery.
Paramount on Thursday said that it had filed preliminary proxy materials in anticipation of a proxy fight, and prolonged its deadline for WBD shareholders to tender their shares to the corporate for an additional month to Feb. 20.
Earlier this week, Netflix modified its deal to accumulate Warner Bros. to be all-cash valued at $27.75 per share (plus the Discovery Global spinoff “stub”), but despite that change Paramount says that it’s sticking with its $30 per share offer for the entire company.
Paramount says that it would ask WBD shareholders to reject the merger deal, to reject the Discovery spinoff (which might occur months before the deal is accomplished) and to reject the pay packages for senior WBD executives, including CEO David Zaslav.
While the proxy fight won’t see a battle for control of the board, with WBD planning a special meeting specifically for the Netflix merger, it would nonetheless be a high-profile battle for control of certainly one of the entertainment business’ last great studios. And while the battle won’t be waged for so long as Disney’s fight with Nelson Peltz, it could get pricey for either side, as The Hollywood Reporter previously noted.
Netflix shareholders, meanwhile, don’t seem as keen on the deal, with the streaming giant’s stock hitting a 52-week low after its earnings report this week.
That being said, the filing also suggests that Paramount has a protracted option to go to influence WBD shareholders. Thus far a bit over 168 million WBD shares have been tendered, but the corporate has nearly 2.5 billion shares outstanding. If shareholder interest continues to wane, Paramount could raise its bid to influence them to vote no or to tender their shares.