In a bold move to secure its acquisition of Warner Bros. Discovery (WBD), Paramount has sweetened its hostile takeover offer by securing a personal guarantee worth over $40 billion from Oracle chairman Larry Ellison, the father of Paramount CEO David Ellison.
This latest development comes less than a week after WBD rejected Paramount’s initial $108.4 billion bid, worth $30 per share, in favour of Netflix’s $72 billion deal. Determined to outmanoeuvre its streaming rival, Paramount is now offering a more compelling financial package to address WBD’s concerns about the financing of the proposed transaction.
Alongside the personal guarantee from Larry Ellison, Paramount has also agreed to increase its reverse break-up fee, payable if the deal falls through, to $5.8 billion, matching Netflix’s offer. The company has also offered greater flexibility to WBD on debt refinancing and interim operating covenants, addressing the media conglomerate’s desire for more autonomy during the integration process.
In a statement, David Ellison emphasised Paramount’s commitment to the acquisition, stating: “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.”
Ellison further argued that Paramount’s acquisition would serve as a “catalyst for greater content production, greater theatrical output, and more consumer choice,” positioning the combined entity as a formidable player in the rapidly evolving media landscape.
The inclusion of Larry Ellison’s personal guarantee is a significant move, designed to allay any doubts about Paramount’s ability to finance the transaction. The Ellison family trust, which has been operating for nearly 40 years, has been cited as a counterparty to numerous transactions, providing further assurance to WBD and its shareholders.
As the bidding war intensifies, the outcome of this high-stakes acquisition remains uncertain. However, Paramount’s latest offer, bolstered by the Ellison family’s financial backing, could prove a compelling proposition for WBD’s board of directors as they weigh their options to secure the best possible value for their shareholders.
