Larry Ellison, the billionaire father of Paramount CEO David Ellison and Oracle founder, has agreed to provide an irrevocable personal guarantee of $40.4bn of the equity financing as part of a revised Paramount Skydance bid for Warner Bros Discovery (WBD).
WBD had said that the full equity backstop from the Ellison family trust—which was included in Paramount’s December 4 proposal to WBD and the December 8 tender offer to WBD shareholders - was inadequate, and that the only fix would be a personal guarantee from Larry Ellison.
A Paramount statement issued today (December 22) noted: “None of these concerns, nor the demand for a personal guarantee, were raised by WBD or its advisors to Paramount in the 12-week period leading up to WBD agreeing to the inferior transaction with Netflix.”
In addition, Larry Ellison has agreed not to revoke the Ellison family trust or adversely transfer its assets during the pendency of the transaction; Paramount is publishing records confirming that the Ellison family trust owns approximately 1.16 billion shares of Oracle common stock and that all material liabilities of the Ellison family trust are publicly disclosed; and to match the pending transaction, Paramount will increase its regulatory reverse termination fee from $5bn to $5.8bn (matching that of Netflix).
Paramount has extended the end date for the tender offer to January 21 2026.
Paramount’s statement also noted that, “In an effort to address WBD’s amorphous need for ‘flexibility’ in interim operations, Paramount’s revised proposed merger agreement offers further improved flexibility to WBD on debt refinancing transactions, representations and interim operating covenants.”
Paramount is aiming to acquire Warner Bros and 100% of the Global Networks business, whereas Netflix’s offer, which is preferred by the WBD board, is for the Warner Bros business only.
On December 5, Netflix confirmed it would acquire Warner Bros in a deal worth $82.7bn, under which Netflix will acquire its film and television studios, HBO Max and HBO, but not Discovery Global. The cash and stock transaction was valued at $27.75 per WBD share with a total enterprise value of approximately $82.7bn (equity value of $72bn).
On December 8, Paramount went directly to the WBD shareholders with its hostile all-cash bid to acquire all of the company for $30 a share that gave the target an enterprise value of $108bn.
On December 17, the WBD board reiterated its support for the Netflix offer.
Paramount maintains that there is a lack of clarity from the WBD board regarding the calculations through which it has concluded that the Netflix offer is superior.
David Ellison, chairman and CEO of Paramount, said: “Paramount has repeatedly demonstrated its commitment to acquiring WBD. 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. 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 theatrical output, and more consumer choice. We expect the board of directors of WBD to take the necessary steps to secure this value-enhancing transaction and preserve and strengthen an iconic Hollywood treasure for the future.”
No comments yet