Tech billionaire and Oracle Co-founder Larry Ellison has agreed to provide a personal guarantee of more than $40bn for Paramount Skydance’s bid for control of Warner Bros Discovery.
Warner Bros Discovery had urged shareholders to reject a $108.4bn hostile takeover bid from Paramount last week, having agreed to sell its storied movie studios, HBO cable network and streaming service to Netflix in a $82.7bn deal earlier this month.
It also accused Paramount of having “consistently misled” investors by claiming its offer had a “full backstop” – a safety net to ensure it has sufficient funds from the Ellisons.
In an effort to address these concerns, Paramount said on Monday morning that Larry Ellison, the co-founder of tech giant Oracle, had agreed to personally backstop $40.4bn in equity financing for the proposed deal.
Paramount Bid
Unlike Netflix, which has agreed to buy only the movie studios, HBO and HBO Max from WBD, Paramount has bid for the entire company which also includes CNN, Cartoon Network and the Discovery channel.
David Ellison, chairman and CEO of Paramount, and son of Larry, said: “Paramount has repeatedly demonstrated its commitment to acquiring WBD. Our $30 per share, fully financed all-cash offer was on December 4th, 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.” he said.
The financier Gerry Cardinale, whose RedBird Capital firm is an investor in Paramount and involved in its bid for WBD, told CNBC on Monday: “What we’ve done in this amended filing is we’ve cleared the brush of obfuscation around the offer.”
“At the end of the day … the shareholders own this company. The board doesn’t own it. [WBD CEO] David Zaslav doesn’t own this company,” said Cardinale. “This should be a lot more simple than it is. It’s very simple.”
