Larry Ellison Agrees to Personally Guarantee Paramount Bid for Warner Bros. in Revised Offer
David Ellison’s Paramount has sent a revised offer to acquire Warner Bros. that maintains its $30-per-share price tag but resolves many of the problems WBD’s board had with the deal.
The big change: Larry Ellison, David Ellison’s father and Oracle founder, agreed to personally back $40.4 billion in equity financing tied to the deal and agreed not to cancel the Ellison family foundation or reverse transfer its assets while any deal is pending.
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“Paramount has repeatedly demonstrated its commitment to acquiring WBD. Our all-cash-financed offer of $30 per share was made on December 4.This“WBD remains a superior option to maximize value for shareholders,” David Ellison said in a statement Monday. “Because of our commitment to investment and growth, our acquisition will be superior to all WBD stakeholders as a catalyst for greater content production, greater theatrical output and greater consumer choice. We expect WBD’s board of directors to take the necessary steps to secure this value-enhancing transaction and preserve and strengthen the iconic Hollywood treasure for the future.”
Paramount also increased its termination fee to $5.8 billion, the same as Netflix, and extended the tender offer expiration date to January 21, 2026, giving WBD shareholders a few more weeks to decide. The date may also be extended again by Paramount if deemed prudent.
Paramount will likely need extra time to convince shareholders. In the application filed on Monday, it was stated that as of the end of business on December 19, only 397,252 shares were validly tendered and not withdrawn. WBD has more than 2.4 billion shares outstanding. However, it is not uncommon for institutional shareholders to wait until the last minute to formally tender their shares, even if they have indicated they intend to do so.
Ellison, of course, Warner Bros. It is trying to pry Discovery away from Netflix, which signed a definitive agreement to buy its streaming and studio business earlier this month. Unlike Netflix, Paramount plans to allow streaming giant WBD to continue growing its linear network business while seeking to acquire the entire company.
Following WBD’s acquisition of Netflix, Paramount initiated a hostile tender offer, prompting an official response from WBD last week. Paramount’s revised bid appears to have resolved many of WBD’s ongoing concerns, although outside financing from Middle East sovereign wealth funds remains. The value of WBD’s linear networks remains an important question mark; Paramount estimates these at $1 per share.
