Shareholder Activism Takes the Stage in Key Entertainment Deal

The latest real-life drama dominating the Hollywood headlines has seen more plot twists than anything available on your favorite streaming service.

The saga kicked off in December when Netflix announced an $82.7 billion deal to acquire Warner Bros. Discovery’s (WBD) studios and streaming assets. Not to be outdone, Paramount Skydance launched a hostile bid to buy WBD’s entire company, triggering a shareholder revolt. Activist investor Ancora Holdings, owner of a roughly $200 million stake in WBD, publicly criticized the Netflix deal as “flawed, inferior and high risk” and threatened a proxy fight to replace directors on the WBD board if they didn’t re-engage with Paramount. Hedge fund Pentwater Capital also expressed concerns, arguing WBD violated its duty to shareholders when it dismissed Paramount’s bid.

Even though its board initially cited 93% shareholder support for the Netflix deal, WBD eventually reopened negotiations with Paramount. Netflix walked away.

The bidding war sounds like material for a compelling screenplay. It might bore investment-savvy audiences, though, because such deal dynamics around mergers and acquisitions are becoming commonplace on Wall Street.

According to a report on shareholder activism from financial software company Diligent, more than 30 U.S. companies faced investor pushback against announced M&A deals in 2025, up from 19 in 2024. Activist push-to-sell demands hit a five-year high in 2025, rising 29% year-over-year. And an analysis from law firm Cleary Gottlieb found that more than 60% of activist campaigns in the fourth quarter of 2025 had an M&A emphasis, which was the highest proportion in five years.

Similar power struggles to the one involving WBD played out in boardrooms across corporate America last year. In October, shareholders of data center company Core Scientific voted down a $9 billion all-stock acquisition bid by CoreWeave. Even though Core Scientific’s board had unanimously approved the transaction, opponents of the deal – led by Two Seas Capital and backed by proxy advisory firms ISS and Glass Lewis – argued the terms undervalued the company and exposed stockholders to undue risk.

A few months after the Core Scientific deal fell through, lens maker STAAR Surgical backed out of its proposed acquisition by eye-care product manufacturer Alcon. Stockholders rejected the deal at a January 6 special meeting following months of campaigning by STAAR’s largest shareholder, Broadwood Partners. The private equity firm argued the terms of the proposed sale came as the result of a rushed, one-sided process on the part of STAAR’s board of directors.

The effective opposition to these transactions suggests activist stockholders have refined their strategies to influence dealmaking. Apparently, institutional investors prefer to hear arguments couched in the language of fiduciary duty. Note, for instance, that the objections to CoreWeave’s offer for Core Scientific focused on its uncollared, all-stock structure.

What can boards do to respond to shareholder opposition to these deals? Lawyers at Fried Frank recommend that directors think ahead about potential challenges, enabling them to prepare strong counterarguments in favor of their positions. That might entail a thorough review into the dynamics of their companies’ businesses and corporate governance structures. Keeping up ongoing dialogues with stockowners and stakeholders can also help boards identify unforeseen stumbling blocks.

Will shareholders flock to a proposed deal like the next Marvel blockbuster or reject it as harshly as seeing “Cats” on the big screen? Proactive engagement and careful preparation may help boards anticipate shareholder reactions and position proposed transactions for broader investor support.

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