Paramount responds to WBD concerns by offering financing guarantee to Larry Ellison
Paramount amended its hostile bid for Warner Bros. on Monday. Discovery, adding an “irrevocable personal guarantee” from Larry Ellison in support of the $108 billion proposal.
WBD raised a series of concerns about the offer last week, noting that it had already formally accepted an offer from Netflix for $82.7 billion.
Ellison, one of the world’s richest men, has long supported Skydance, run by his son David. Although the elder Ellison is participating in WBD’s proposed transaction, the WBD board expressed concern that it would be done through a trust that could technically be manipulated in unpredictable ways.
“Larry Ellison has agreed to provide an irrevocable personal guarantee of $40.4 billion from the equity financing for the offering and any claims for damages against Paramount,” Paramount said in an SEC filing.
The financial value of Paramount’s offer, at $30 per share, was not changed as part of Monday’s actions.
Paramount also said it was increasing its breakup fee (the amount it would pay if a deal isn’t reached) from $5 billion to $5.8 billion, matching Netflix’s. Larry Ellison also agreed not to revoke the Ellison family trust, Paramount said, or “adversely transfer its assets during the term of the transaction.”
The Ellison family trust owns about 1.16 billion shares of Oracle common stock, Paramount said, adding that “all material liabilities” of the Ellison family have been made public.
In announcing the multi-part modification to its offer, Paramount criticized the conduct of the merger process. He asserted that “none” of the WBD board’s concerns, “nor the request for a personal guarantee, were raised by WBD or its advisors with Paramount during the 12-week period prior to WBD’s agreement to the lower transaction with Netflix.”
The battle for WBD will reshape the entertainment landscape, regardless of who prevails. Both contenders are also likely to attract a high degree of scrutiny from regulators. Just weeks before its pursuit of WBD was made public, Paramount had reached a long-standing deal to merge with Skydance.
Paramount’s offer applies to all of WBD, including its legacy cable networks. Netflix, on the other hand, aims to acquire only the studio and streaming division that houses Warner Bros. and HBO. WBD planned a split into two companies in 2026. Netflix intends to allow the split before taking over the studio and streaming portfolio.
In its latest update, Paramount said it is also extending the deadline for shareholders from January 8 to January 21.
“Paramount has repeatedly demonstrated its commitment to acquiring WBD,” said David Ellison, CEO of Paramount. “Our all-cash funded offering of $30 per share occurred on December 4 and continues to be the most advantageous option to maximize value for WBD shareholders. Because of our commitment to investment and growth, our acquisition will be superior for all WBD stakeholders, as a catalyst for greater content production, greater film production and greater choice for consumers. We look forward to the WBD Board of Directors taking action necessary to secure this valuable transaction and preserve and strengthen an iconic Hollywood treasure for the future.”
