Larry Ellison Backs $40.4 Billion Equity Financing for Paramount's Warner Bros Discovery Bid
Larry Ellison has agreed to personally backstop approximately $40.4 billion in equity financing to support Paramount Skydance's bid to acquire Warner Bros Discovery (WBD). Paramount is seeking to purchase the entire Warner Bros Discovery company, which includes assets such as CNN, Cartoon Network, and Discovery. This bid is a hostile offer valued at $108.4 billion, which WBD has urged its shareholders to reject.
Previously, Warner Bros Discovery had agreed to a deal with Netflix valued at $82.7 billion for the sale of WBD's movie studios, HBO cable network, and streaming assets. Paramount's offer, by contrast, is a fully financed all-cash bid at $30 per share, with Ellison's financial backstop intended to guarantee the availability of funds.
Aside from Ellison, other backing reportedly includes Affinity Partners, led by Jared Kushner, the Saudi Public Investment Fund, and the Qatar Investment Authority; though Affinity Partners has recently stepped back from the bid. Gerry Cardinale of RedBird Capital emphasized in an amended filing that the offered funding is clear and reminded that shareholders, not the board, ultimately own the company.
Warner Bros Discovery's board has characterized Paramount's proposal as inadequate and cited significant risks and costs associated with the bid. They instead accepted Netflix's offer, which involves the sale of select assets rather than a full company takeover.
In response to these developments during morning trading, Warner Bros Discovery shares rose about 2.8%, Paramount's shares increased by approximately 7%, while Netflix shares declined by about 0.8%.
