Warner Bros. Discovery plans to reject Paramount’s revised takeover proposal despite billionaire investor Larry Ellison agreeing to provide an “irrevocable personal guarantee” supporting the $108 billion hostile bid, according to media reports.
Paramount adjusted its hostile takeover bid last week to reassure shareholders about its financing and increase its breakup fee to $5.8 billion, matching Netflix’s offer.
WBD’s board still views its $83 billion deal with Netflix as the best deal. According to the Financial Times, the board has not made a final decision but is expected to reject Paramount’s revised offer at a meeting scheduled for next week.
The amended offer comes after WBD’s board rejected Paramount’s $30 per share all-cash offer, calling it “inadequate” and “illusory.” The offer marked the sixth proposal from the studio and new CEO David Ellison in 12 weeks.
Paramount’s sixth offering includes a total of $40.7 billion in equity financing, including $11.8 billion from the Ellison family and $24 billion from the Public Investment Fund of Saudi Arabia, the Qatar Investment Authority and Abu Dhabi’s L’imad Holding Company, according to a filing with the U.S. Securities and Exchange Commission.
Jared Kushner’s Affinity Partners initially agreed to contribute $200 million to Paramount’s bid, but withdrew in recent weeks, according to the New York Times. At the time, Gerry Cardinale’s Ellisons and RedBird Capital Partners agreed to fully underwrite 100% of the equity financing through the Ellison family trust.
The offering also includes $54 billion in debt financing from Bank of America, Citibank and Apollo Global Management. About $17 billion had been set aside to allow WBD to extend an existing bridge loan.
A spokesperson for Warner Bros. Discovery did not immediately respond to TheWrap’s request for comment.
Bloomberg was the first to report the news.
