Larry Ellison Backs $40 Billion Financing for Paramount's $108.4 Billion Bid to Take Control of Warner Bros Discovery
Larry Ellison has agreed to personally backstop more than $40 billion in equity financing to support Paramount Skydance's hostile takeover bid of Warner Bros Discovery (WBD). Paramount launched a $108.4 billion bid to acquire the entire WBD, including assets such as CNN, Cartoon Network, and Discovery, aiming to take control of the company.
WBD's board has urged shareholders to reject Paramount's offer, citing significant risks and costs associated with the deal. Paramount, however, argues that its offer would maximize value for shareholders and stakeholders alike. The WBD board deemed the bid inadequate, while Paramount maintains their proposal presents the best outcome for the company’s ownership.
Meanwhile, Netflix has also made a competing offer, bidding $82.7 billion, but its bid covers only WBD’s movie studios and HBO/HBO Max, not the broader portfolio targeted by Paramount.
The $40.4 billion amount personally backstopped by Ellison is intended to assure financing for the proposed deal. Funding sources reportedly include outside investors such as Affinity Partners (associated with Jared Kushner), the Saudi Public Investment Fund, and the Qatar Investment Authority. However, Jared Kushner’s Affinity Partners has stepped back from the process.
Gerry Cardinale of RedBird Capital commented that the amended filing clarifies the offer, emphasizing that shareholders ultimately own the company rather than the board.
Following these developments, market reactions reflected volatility: shares of Warner Bros Discovery rose approximately 2.8%, Paramount's shares climbed about 7%, while Netflix's shares fell roughly 0.8%.
