Oracle tech tycoon Larry Ellison is offering a $40.4 billion personal guarantee to back Paramount’s hostile bid for Warner Bros. Discovery, deepening a bidding war with Netflix, a statement said on Monday.
The amended proposal, worth a total $108 billion from the company run by Ellison’s son David, addresses concerns raised by Warner Bros’ board, which saw the Paramount bid as too risky and asked shareholders to accept a competing buyout offer from Netflix.
Netflix shocked the industry December 5 by announcing it had sealed an agreement to buy the film and television studio and HBO Max streaming business for nearly $83 billion, the entertainment industry’s biggest consolidation deal this decade.
Three days later, Paramount — whose CEO is David Ellison, son of Larry Ellison, an ally of President Donald Trump — launched an all-cash tender offer valuing the entertainment giant at $108.4 billion.
But Warner Bros last week described the Paramount offer as risky, saying it was backed by “an unknown and opaque revocable trust” and involved “no Ellison family commitment of any kind.”
Warner Bros Discovery also stressed the dependence of the Paramount offer on foreign investors — $24 billion of the financing comes from Middle East sovereign wealth funds — which could require further government approval.
Paramount’s amended proposal is meant to address those concerns and also increases the breakup fee to match Netflix’s $5.8 billion, which would be payable to Warner Bros if its offer does not clear regulatory review.
“Paramount has repeatedly demonstrated its commitment to acquiring WBD,” said David Ellison. “Our $30 per share, fully financed all-cash offer… continues to be the superior option to maximize value for WBD shareholders.”
Unlike Netflix’s offer, Paramount’s bid includes the buyout of cable channels such as CNN, TNT, TBS and Discovery — which would be added to its group of TV assets like CBS, MTV and Comedy Central.
Credit: AFP
