Paramount Addresses WBD Concerns Over Hostile Bid with New Financing Support from Larry Ellison
Paramount Amends Bid for Warner Bros. Discovery with New Personal Guarantee from Larry Ellison
In a significant development in the ongoing acquisition battle for Warner Bros. Discovery (WBD), Paramount has revised its hostile bid, now including an “irrevocable personal guarantee” from billionaire Larry Ellison. This adjustment supports the previously announced $108 billion proposal.
WBD raised several concerns about Paramount’s offer last week, emphasizing that it had accepted a competing bid from Netflix, valued at $82.7 billion.
Ellison, who backs Skydance—a company led by his son David—has been a notable figure in this transaction. While his involvement aims to strengthen Paramount’s position, WBD’s board previously expressed unease regarding the nature of his participation through a trust that may allow for unpredictable alterations.
In an SEC filing, Paramount stated, “Larry Ellison has agreed to provide an irrevocable personal guarantee of $40.4 billion of the equity financing for the offer and any damages claims against Paramount.”
The financial structure of Paramount’s offer remains unchanged at $30 per share, despite the recent amendments. Additionally, Paramount has increased its breakup fee from $5 billion to $5.8 billion, aligning it with Netflix’s terms. The filing also noted that Ellison has committed not to revoke the Ellison family trust or adversely transfer its assets during the transaction period.
According to Paramount, the Ellison family trust holds approximately 1.16 billion shares of Oracle common stock, with all significant liabilities disclosed publicly.
In announcing its revised proposal, Paramount criticized the WBD board’s handling of the merger process, claiming that the board’s concerns and the request for a personal guarantee were not communicated during the 12 weeks leading up to WBD’s agreement with Netflix.
The competition for WBD is poised to reshape the entertainment industry, regardless of the outcome. Both Paramount and Netflix are expected to face rigorous scrutiny from regulators. Notably, just weeks before its pursuit of WBD became public, Paramount concluded a major merger with Skydance.
Paramount’s bid seeks to acquire all of WBD, including its legacy cable networks, while Netflix is focused only on the studio and streaming division that encompasses Warner Bros. and HBO. WBD had initially planned a split into two companies by 2026, an intention Netflix suggests will proceed prior to its acquisition.
Furthermore, Paramount has extended the deadline for shareholders to respond to the offer from January 8 to January 21.
“Our $30 per share, fully financed all-cash offer was on December 4 and continues to be the superior option to maximize value for WBD shareholders,” said Paramount CEO David Ellison. He emphasized that the acquisition would serve as a catalyst for enhanced content production, increased theatrical output, and more choices for consumers, urging WBD’s board to embrace this value-enhancing opportunity for the future of the company.
