By Aditya Soni Jan 12 (Reuters) – Paramount Skydance on Monday sued Warner Bros Discovery for more information on a rival $82.7 billion deal with Netflix, escalating a battle to take control of one of the most storied Hollywood studios. The David Ellison-led company also said it planned to nominate directors to Warner Bros' board, in one of its most aggressive steps to convince investors that its $108.7 billion all-cash bid is superior to Netflix's cash-and-stock deal. Paramount and Netflix have been in a heated battle for Warner Bros, its prized film and television studios and its extensive content library, which includes "Harry Potter" and the DC Comics universe. Warner Bros last week rejected Paramount's latest offer, advising shareholders to vote in favor of the Netflix deal. In a letter to shareholders, Paramount also said it would propose an amendment to Warner Bros' bylaws that would require shareholder approval for any separation of the media giant's cable TV business, which is key to the Netflix deal. Paramount's argument is that its all-cash bid of $30 per share for the whole of Warner Bros is superior to Netflix's cash-and-stock offer of $27.75 per share for the studios and streaming assets and will more easily clear regulatory hurdles. 'RAISE THE BID. MONEY TALKS' The CBS parent said last week the value of Warner Bros' cable spinoff was virtually worthless and reiterated its amended bid after another rejection from Warner Bros' board. With Monday's lawsuit, Paramount has escalated its actions, but it has not yet increased the price it is willing to pay. "I don’t think the lawsuit matters much. It would take ages to get through the court system if they full-on go that route," Craig Huber, analyst at Huber Research Partners, said. "If they want Warner Bros bad enough, raise the bid. Money talks." Warner Bros has also said it will owe Netflix a $2.8 billion termination fee if it walks away from the agreement, part of $4.7 billion in extra costs to end the deal. The amended proposal had included $40 billion in equity personally guaranteed by Oracle's co-founder Larry Ellison, the father of Paramount CEO David Ellison, and $54 billion in debt. "WBD has provided increasingly novel reasons for avoiding a transaction with Paramount, but what it has never said, because it cannot, is that the Netflix transaction is financially superior to our actual offer," Paramount wrote in the investor letter. "Unless the WBD board of directors decides to exercise its right to engage with us under the Netflix merger agreement, this will likely come down to your vote at a shareholder meeting," it added. Netflix and Warner Bros did not immediately respond to requests for comment. Shares of Warner Bros were down 1.5% on Monday, while Netflix ticked up 0.6% and Paramount 0.7%. Paramount filed the lawsuit in the Delaware Court of Chancery, seeking to force disclosure of the financial analysis behind the Warner Bros board's support for the Netflix merger. The company argued the information is crucial for investors weighing whether to tender their shares to Paramount before the offer – which can be extended – expires on Jan. 21. "Time is of the essence," Paramount said in the lawsuit against Warner Bros, CEO David Zaslav and key investor John Malone, among others. "Any decision concerning an extension will depend, in part, on the number of shares tendered." (Reporting by Aditya Soni in Bengaluru, additional reporting by Arnav Mishra and Deborah Sophia; Editing by Tasim Zahid, Sriraj Kalluvila and Anil D'Silva)
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