The tech billionaire Larry Ellison has agreed to provide a personal guarantee of more than $40bn for Paramount Skydance’s fight to gain control of Warner Bros Discovery, amid an extraordinary corporate battle over the entertainment giant.
WBD urged shareholders to reject a $108.4bn hostile takeover bid from Paramount – which is controlled by the Ellisons – 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.
WBD 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 a bid 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 said it was attempting to tackle WBD’s “amorphous need” for financial flexibility, and bluntly denied the Netflix offer was superior.
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 includes CNN, Cartoon Network and the Discovery channel. But WBD’s board directors concluded its bid was “inadequate”, with “significant” risks and costs.
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.”
