Paramount Sky (PSKY.US) intervenes to block the trade of Netflix (NFLX.US), planning to reorganize the board of Warner Bros. Discovery (WBD.US) and file a lawsuit.

Paramount Sky (PSKY.US) is stepping up efforts to block Warner Bros. Discovery (WBD.US) from exploring a merger with Netflix (NFLX.US). The company stated that it plans to nominate a new list of board candidates to restructure the Warner Bros. Discovery board and has filed a lawsuit demanding more information related to the Netflix deal. Paramount Sky CEO David Ellison wrote in a letter to the Warner Bros. Discovery board on Monday that if Warner Bros. Discovery holds its annual shareholders meeting, or a special shareholders meeting to approve the Netflix deal, he will challenge the deal through shareholder voting channels. Ellison also stated that Paramount Sky has filed a lawsuit in Delaware court against Warner Bros. Discovery, seeking disclosure of necessary information to help shareholders make informed decisions. Paramount Sky alleges that Warner Bros. Discovery did not fully disclose the valuation method of its cable TV assets planned to be divested before the deal. Under the current plan, Warner Bros. Discovery plans to spin off cable channels including CNN and TNT to existing shareholders before selling its film and streaming business to Netflix. Paramount Sky states that it will seek to amend Warner Bros. Discovery's bylaws to allow shareholders to vote separately on the spinoff. In the market, Warner Bros. Discovery's stock price fell over 2% in early trading in New York after the news was announced; Netflix's stock price rose slightly; and Paramount Sky's stock price remained mostly unchanged. Paramount Sky reiterated that its acquisition offer for Warner Bros. Discovery remains at $30 per share and urged shareholders to sell their shares according to the offer previously announced. The company believes that its bid for Warner Bros. Discovery's overall business is superior to Netflix's offer of $27.75 per share for its film and streaming business. "We will continue to push forward with this tender offer," Ellison stated in the letter, "but we also recognize that the outcome will likely ultimately depend on the results of the shareholder meeting, unless the Warner Bros. Discovery board chooses to engage with us based on the merger agreement with Netflix."