Paramount Sweetens Hostile Bid for Warner Bros. Discovery With $40bn Personal Guarantee From Larry Ellison
Paramount has escalated its hostile takeover attempt of Warner Bros. Discovery (WBD) by announcing that Oracle founder Larry Ellison will personally guarantee the full equity portion of the proposed deal, a move aimed at easing concerns over its financing structure.
In a statement released on Monday, Paramount said Ellison will back the entire $40.4 billion equity commitment underpinning the roughly $78 billion offer for WBD. The guarantee places the billionaire directly on the line should the transaction fail, addressing repeated claims by WBD’s board that Paramount’s financing lacked sufficient credibility.
The revised proposal also includes increased transparency around the Ellison family trust, with Paramount confirming it holds 1.16 billion Oracle shares. Ellison has additionally agreed not to revoke the trust, a step designed to prevent complications that could affect deal funding.
Warner Bros. Discovery’s board has previously rejected Paramount’s offer several times, instead favouring a competing bid from Netflix, which it believes delivers greater long-term value. The board has accused Paramount of mischaracterising its financial position and described aspects of its proposed funding as uncertain.
Alongside the personal guarantee, Paramount raised its breakup fee to $5.8 billion, matching the penalty Netflix has agreed to pay should its own deal collapse. However, the overall valuation of Paramount’s offer remains unchanged.
Paramount is offering $30 per share for WBD, including its cable television assets such as CNN. Netflix’s bid stands at $27.75 per share for Warner Bros. and HBO, but both Netflix and WBD argue that spinning off cable channels would ultimately result in a higher total valuation than Paramount’s all-in proposal.
The WBD board is expected to formally review the revised bid, though it is unclear whether the latest concessions will be enough to shift its position. As the offer remains hostile, WBD shareholders could ultimately challenge the board’s recommendation.
A significant portion of Paramount’s financing is reportedly backed by sovereign wealth interests from Saudi Arabia, Qatar and Abu Dhabi, a factor that has drawn scrutiny from WBD directors. Paramount has maintained that its funding is secure, with CEO David Ellison publicly dismissing doubts raised by the WBD board.
Following the announcement, Warner Bros. Discovery shares rose by 4% in Monday trading. Paramount’s stock gained 3%, while Netflix shares remained flat.
