Billionaire Larry Ellison, father of Paramount CEO David Ellison and founder of Oracle, has agreed to provide an irrevocable personal guarantee for $40.4 billion in equity financing as part of Paramount Skydance’s revised bid for Warner Bros. Discovery (WBD).
WBD had stated that the full equity backstop from the Ellison Family Trust, which was included in Paramount’s Dec. 4 offer to WBD and its Dec. 8 tender offer to WBD shareholders, was inadequate and that the only solution would be a personal guarantee from Larry Ellison.
“None of these concerns or requests for personal guarantees were raised by WBD or its advisors to Paramount in the 12 weeks prior to WBD agreeing to the inferior deal with Netflix,” Paramount said in a statement Monday.
Later Monday, WBD issued a statement saying it had received the revised tender offer and would consider it, adding that “the board does not intend to change its recommendation (to stockholders) regarding the Netflix merger agreement.”
Ellison also agreed not to cancel the Ellison Family Trust or improperly transfer its assets during the pendency of the transaction. Paramount has published records confirming that the Ellison Family Trust owns approximately 1.16 billion shares of Oracle common stock and that all material debt of the Ellison Family Trust has been disclosed. And to match the pending deal, Paramount plans to increase its regulatory termination fee from $5 billion to $5.8 billion (the same amount as Netflix’s fee).
Paramount has extended the end date of the tender offer to January 21, 2026.
Paramount’s statement also said, “In an effort to address WBD’s amorphous need for ‘flexibility’ in interim operations, Paramount’s amended proposed merger agreement provides WBD with further improved flexibility with respect to debt refinancing transactions, representations, and interim operating terms.”
Paramount is seeking to acquire 100% of Warner Bros. and its Global Networks business, while the Netflix proposal favored by the WBD board targets only Warner Bros.’ studios and streaming operations.
On December 5th, Netflix confirmed it would acquire Warner Bros. in a deal valued at $82.7 billion, under which Netflix would acquire the company’s film and television studios HBO Max and HBO, but not Discovery Global. The cash and stock transaction values WBD stock at $27.75 per share, giving the company a total enterprise value of approximately $82.7 billion (equity value: $72 billion).
On December 8, Paramount acquired the entire company in an all-cash bid hostile to WBD shareholders for $30 per share, with a target enterprise value of $108 billion.
On December 17, the WBD Board reiterated its support for Netflix’s offer.
Paramount claims there is a lack of clarity from the WBD board about the calculations that led it to conclude that Netflix’s offer was superior.
“Paramount has repeatedly demonstrated its commitment to acquiring WBD,” said David Ellison, Chairman and CEO of Paramount. “Our $30 per share, all-cash offer, made on December 4, continues to be an excellent option that maximizes value for WBD shareholders.” “With our commitment to investment and growth, our acquisition will be great for all WBD stakeholders and will be a catalyst for greater content production, greater theatrical production, and more consumer choice.” Take the necessary steps to secure this value-enhancing deal and preserve and enhance this iconic Hollywood treasure for the future. ”
(TagTranslate)Netflix
