Paramount Global filed preliminary proxy materials Thursday urging Warner Bros. Discovery shareholders to reject the pending Netflix merger, while extending its competing tender offer deadline to April 7, 2025. The filing marks the formal start of a proxy contest that will run parallel to regulatory review, forcing Warner's board into simultaneous defense on two fronts.
The proxy materials argue that Paramount's all-cash offer of $58 per share delivers immediate liquidity without the regulatory risk embedded in the Netflix-Warner combination, which still awaits Federal Trade Commission approval under the Hart-Scott-Rodino timeline. Paramount cited Netflix's $17 billion content commitment and Warner's $42 billion debt load as creating integration risk that its standalone bid avoids. The tender extension gives Warner shareholders three additional weeks to evaluate both proposals while Netflix completes its HSR filing process, expected to trigger a 30-day initial review window.
The proxy fight changes the deal arithmetic for Warner's board and its advisors at Goldman Sachs. Netflix-Warner requires a simple majority vote at a special shareholder meeting, now likely scheduled for late April. Paramount's tender offer runs on a first-come basis but needs board recommendation to trigger the 67% acceptance threshold buried in Warner's charter. By filing preliminary materials now, David Ellison forces Warner to produce a definitive proxy statement responding to both offers, typically a 14-day SEC review process that extends the decision timeline into May. That delay benefits Paramount if Netflix encounters FTC resistance or if Warner's Q1 earnings on April 30 disappoint, giving shareholders a reason to prefer cash certainty.
The strategic question is whether Paramount can win enough retail and index shareholders to pressure Warner's board into a formal auction process. Netflix-Warner carries a $152 billion combined enterprise value with potential synergies Warner's advisors estimate at $3 billion annually, but those savings take 18 months to materialize. Paramount's bid delivers $14 billion in cash proceeds to Warner shareholders immediately, avoiding the 9-12 month regulatory process Netflix-Warner faces. Warner's top 20 institutional holders, controlling 43% of shares, will compare Paramount's liquidity premium against Netflix's strategic rationale when proxy materials go final.
Watch for Netflix to accelerate its HSR filing or offer a reverse breakup fee as a countermove. Paramount's extension to April 7 also lines up with Warner's blackout period before earnings, potentially timing a tender close when Warner cannot publicly defend the Netflix deal. If FTC staff issues a second request by mid-April, the regulatory timeline stretches to August, making Paramount's immediate cash more attractive. Warner's board has 10 business days under Delaware law to respond once Paramount's proxy goes effective.