Delaware judge refuses to fast-track Paramount suit over Warner Bros–Netflix deal

NEW YORK: A Delaware judge has declined to put Paramount Skydance’s lawsuit against Warner Bros. Discovery on a fast track, dealing an early setback to Paramount’s effort to prise open details of Warner Bros.’ proposed $82.7 billion merger with Netflix.

Ruling on Thursday, Morgan Zurn of the Delaware Chancery Court said Paramount had not met the high legal bar required to expedite the case. The media group, she found, failed to show it would suffer “irreparable harm” from what it claims are misleading disclosures by Warner Bros.’ board about the Netflix deal.

As a shareholder rather than a bidder in control of the process, Paramount could not argue it was directly harmed by alleged gaps or errors in disclosures, the judge said, because it would not itself be voting on a tender offer.

The lawsuit, filed earlier this week, sought to force Warner Bros. to provide fuller information about the Netflix transaction before shareholders are asked to approve it. The move has further inflamed an already rancorous takeover battle that has unsettled Hollywood studios and Wall Street alike.

Paramount has been circling Warner Bros. since October, tabling several approaches, including its latest all-cash offer of $30 per share. Warner Bros. has repeatedly rejected those advances, throwing its weight behind Netflix’s $27.75 stock-and-cash proposal, which its board has deemed superior.

“Today’s lawsuit by Paramount Skydance was yet another unserious attempt to distract, and the judge saw right through it,” Warner Bros. said in a statement. The company added that its board had unanimously concluded Paramount’s proposal did not trump the Netflix deal.

Paramount, whose assets include CBS, argues its offer carries fewer risks and lower costs. David Ellison, Paramount’s chairman, said in a letter to shareholders this week that he would contest the Netflix transaction at Warner Bros.’ annual meeting or at a special meeting convened to approve the deal.

Warner Bros., home to franchises ranging from Batman to Harry Potter and the HBO network, now presses on with the Netflix tie-up. Paramount, rebuffed in court and outbid in the boardroom, is left to fight on another day.