Paramount blasts Warner Bros. Discovery as auction nears contentious end

As the high-stakes auction for Warner Bros. Discovery nears its end, Paramount is crying foul, alleging the process was tipped successful favour of a competing bidder: Netflix.

In a scorching missive sent to Warner Bros. Discovery Chief Executive David Zaslav precocious Wednesday, Paramount’s lawyers accused Zaslav’s institution of not playing fair.

“WBD appears to person abandoned the semblance and world of a just transaction process, thereby abdicating its duties to stockholders, and embarked connected a myopic process with a predetermined result that favors a azygous bidder,” an lawyer for Paramount wrote.

The bidder is Netflix.

Early on, the Larry Ellison-family controlled Paramount appeared to person the champion accidental to triumph Warner Bros. Discovery. Paramount launched its run to bargain the larger media company, which owns HBO and CNN, successful September, 1 period aft the Ellisons wrapped up their acquisition of Paramount.

But Warner Bros. Discovery’s committee rejected Paramount’s overtures, and opened the merchantability up to different bidders, allowing Netflix and Comcast, which owns NBCUniversal, to leap in.

People adjacent to the process said precocious the crushed seemed to displacement beneath Paramount, allowing Netflix, which has offered a mostly currency bid, to summation an edge.

Initially, analysts felt that the Ellison family’s lukewarm relations with President Trump astir surely guaranteed that Paramount would guarantee a speedy and creaseless regulatory approval. Trump weighed in, saying Paramount should triumph the prize, allowing the Ellisons to power CBS News arsenic good arsenic CNN.

However, the imaginable of the Ellisons gaining specified a immense swath of U.S. media did not beryllium good with overseas leaders wary of Trump, according to a idiosyncratic adjacent to the auction who was not authorized to talk publicly.

Paramount’s missive cited a caller gathering that Warner planetary enforcement Gerhard Zeiler had successful Brussels with European Commission members “to sermon the imaginable merger prospects” for Warner. E.U. Commission Vice President Henna Virkkunen attended the meeting.

During that meeting, “concerns were raised that the Ellison family’s planned acquisition of Warner Bros. Discovery could pb to excessive media attraction and that the E.U. Commission would see intervening successful a imaginable merger with Paramount for this reason,” according to Paramount’s letter, pointing to a study successful a German paper astir the meeting.

“The implications of specified a meeting, if it occurred, are wide and evince a tacit absorption to, if not progressive sabotage of, a Paramount offer,” Paramount wrote.

Warner Bros. Discovery defended its behaviour Thursday. Lawyers for the institution responded to Paramount saying that, arsenic requested, it had shared the missive with Warner committee members.

“Please beryllium assured that the WBD Board attends to its fiduciary obligations with the utmost care, and they person afloat and robustly complied with them and volition proceed to bash so,” the Warner lawyers wrote.

Paramount said different media reports person mentioned Warner Bros.’ “enthusiasm” for the imaginable of Netflix prevailing successful the bidding — to perchance make a streaming and accepted media behemoth.

Netflix did not remark connected the missive from Paramount.

Paramount’s missive suggests the institution volition not spell distant quietly.

“We stay assured that the Paramount connection would supply the maximum worth to WBD stockholders and look guardant to the accidental to proceed to prosecute with you productively successful this process,” Paramount’s attorneys wrote. “But astatine this constituent we indispensable importune connected assurances and steps taken to guarantee that a genuinely just and autarkic process is being conducted, some for Paramount’s payment and successful the involvement of WBD’s stockholders.”