Paramount amended its hostile bid for Warner Bros. Discovery by adding an “irrevocable personal guarantee” from Larry Ellison in support of the $108 billion proposal.
WBD expressed a number of concerns about this proposal, noting that it had already formally accepted the proposal from Netflix by $82.7 billion.
Ellison, one of the richest men in the world, has long been a supporter of Skydance, which is run by his son David. Although he is a party to the proposed WBD deal, the WBD board expressed concern that it was carried out through a trust that could be manipulated in unknown ways.
“Larry Ellison has agreed to provide an irrevocable personal guarantee of $40.4 billion in equity financing for the offering and any indemnification claims against Paramount,” Paramount said in a filing with the SEC.
The company also said it was increasing its breakup fee (the amount it would pay if the deal fell through) to $5.8 billion from Netflix's $5 billion. Larry Ellison also agreed not to revoke the Ellison family trust, Paramount said, and “not to transfer its assets while the transaction is pending.”
Paramount also confirmed that the Ellison family trust owns approximately 1.16 billion shares of Oracle common stock. It added that “all material liabilities” of the Ellison family have been publicly disclosed.
The battle for control of WBD will change the entertainment landscape no matter who wins. Both contenders are also likely to attract regulatory scrutiny. Just weeks before the pursuit of WBD became public knowledge, Paramount closed its long-simmering merger deal with Skydance.
MORE to come…
