Paramount Skydance says Larry Ellison has provided an “irrevocable personal guarantee” of $40.4 billion for Warner Bros. Discovery bid.
Paramount Skydance, which owns Warner Bros. shareholders. Wanting to reassure that the hostile takeover bid is solid, Discovery said Larry Ellison has provided an “irrevocable personal guarantee of $40.4 billion” for his $108 billion cash bid for WBD to derail Netflix’s pact.
Paramount, led by chairman and CEO David Ellison (Larry’s son), also increased the breakup fee to match Netflix’s $5.8 billion amount payable to WBD in the event the deal fails regulatory review. Paramount announced Monday that it will continue to offer $30 per share in cash for 100% of WBD’s outstanding shares, an offer that would include all of WBD’s assets and liabilities.
Larry Ellison, the co-founder of Oracle with a current net worth estimated at nearly $243 billion, largely financed Skydance Media’s $8 billion acquisition of Paramount Global. That merger was completed in August.
WBD representatives did not immediately respond to a request for comment.
Paramount’s bid is also backed by the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi, as first reported by Variety. (Paramount Skydance’s Dec. 1 bid for WBD included $10 billion in its entirety from Saudi Arabia’s Public Investment Fund, $7 billion from Abu Dhabi’s L’imad Holding Co. and $7 billion from the Qatar Investment Authority.) WBD’s board had raised concerns that it would lead to a problematic national security review by the U.S. government. In response, Paramount disclosed in an SEC filing, the three Arab wealth funds agreed to waive all governance rights – including board representation – associated with their non-voting equity investments. In addition, Affinity Partners, the investment firm led by Jared Kushner (President Trump’s son-in-law), last week halted Paramount’s bid for WBD.
David Ellison said in a statement on Monday: “Paramount has repeatedly demonstrated its commitment to the acquisition of WBD. Our fully funded cash tender offer of $30 per share was made on December 4 and remains 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, catalyzing greater content production, greater theatrical output and greater consumer choice. We expect the board of directors of WBD to take the necessary steps to secure this value-added transaction and preserve and enhance an iconic Hollywood treasure for the future.”
On December 17, WBD’s board officially rejected Paramount’s offer and recommended that Warner Bros. shareholders. Discovery to stick to its $83 billion deal with Netflix, which would see the streaming giant acquire Warner Bros. TV and film studios, HBO and HBO Max, as well as games.
Specifically, the Warner Bros. board said. last week that Paramount has “consistently misled WBD shareholders that the proposed transaction has a ‘full backstop’ from the Ellison family. That is not the case, and never has been.” According to the board of Warner Bros. Discovery, Paramount Skydance’s previous proposal on December 4 included a $40.65 billion equity commitment “for which there is no obligation whatsoever from the Ellison family. Instead, they propose that you rely on an unknown and opaque, revocable trust for the security of the financing of this critical deal.” WBD said the only solution would be a personal guarantee from Larry Ellison.
According to Paramount, WBD had raised no concerns about Paramount’s financing terms, including “the demand for a personal guarantee” from Larry Ellison in the twelve-week period prior to WBD’s agreement to the Netflix transaction. Now, Paramount said, the company has “chosen to address WBD’s current concerns” with an amended offer to WBD shareholders.
The enhanced components of Paramount Skydance’s offering include:
- Irrevocable Personal Guarantee from Larry Ellison: The tech mogul has agreed to provide an irrevocable personal guarantee of $40.4 billion to cover the equity financing for the offering “and any damages claims against Paramount.” As part of that, Larry Ellison has agreed not to withdraw the Ellison family’s trust or “negatively transfer his assets until the transaction is completed.”
- Verification of Trust Assets: Paramount releases data 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 disclosed.
- Improved flexibility when refinancing WBD debts: In an effort to address WBD’s “amorphous need for ‘flexibility’ in interim operations, Paramount’s revised proposed merger agreement provides WBD with even greater flexibility in the areas of debt refinancing transactions, representations and interim operating covenants,” Paramount said.
- Regulatory Termination Fees Matching Netflix: Paramount will increase statutory compensation for reverse termination from $5 billion to $5.8 billion.
In connection with the increased offer, Paramount’s direct wholly owned subsidiary, Prince Sub Inc. (the entity created to carry out the hostile tender offer), the expiration date of the tender offer for WBD shares until 5:00 PM ET on January 21, 2026, unless further extended.
For Paramount’s hostile bid to prevail over the Netflix deal, both WBD’s board of directors and WBD shareholders would have to approve it – unless Paramount receives at least 90% of the outstanding shares of WBD common stock that voted in favor of the proposal.
Paramount has set up a website with information and updates about its WBD offerings at strongerhollywood.com. Netflix’s site with details about the agreement with Warner Bros. stands up netflixwbtogether.com.
Inside the testy WBD-Paramount Deal talks: Ellisons offered Zaslav a pay package worth ‘several hundred million dollars’, which Zaslav said was ‘inappropriate’ to discuss
