In a high-stakes corporate showdown, tech billionaire Larry Ellison has stepped into the limelight by offering a personal guarantee exceeding $40 billion to support Paramount Skydance’s pursuit of a controlling stake in Warner Bros. Discovery (WBD). This dramatic development comes amid escalating tensions over a $108.4 billion hostile takeover bid that WBD has urged its shareholders to reject.
The situation intensified last week when WBD, fresh from an agreement to sell its expansive movie studios, HBO cable network, and streaming service to Netflix for $82.7 billion, accused Paramount of misleading investors about its offer. WBD argued that Paramount’s claim of having a “full backstop”—a financial safety net from the Ellisons—was unfounded.
In response to these allegations and to bolster its standing, Paramount announced on Monday that Larry Ellison, co-founder of Oracle, would personally guarantee $40.4 billion in equity financing for the proposed acquisition. This move is intended to alleviate WBD’s stated concerns about financial flexibility and bolster confidence in the viability of the offer.
Paramount has made it clear that it is interested in acquiring the entirety of WBD, which encompasses not just the movie studios and HBO networks, but also CNN, Cartoon Network, and the Discovery channel. This contrasts sharply with Netflix’s offer, which focuses solely on the film and streaming components. However, WBD’s board has deemed Paramount’s bid to be “inadequate,” citing “significant” risks and costs associated with the proposed acquisition.
David Ellison, chair and CEO of Paramount and Larry’s son, emphasized the company’s commitment to the acquisition. He reiterated that their cash offer of $30 per share, made back in December, represents the superior option for maximizing shareholder value at WBD. David further asserted that the acquisition would invigorate content production, enhance theatrical output, and expand consumer choices.
As the battle plays out, all eyes are on WBD’s board of directors to see whether they will embrace this audacious bid, which Paramount claims is primed to safeguard and fortify a storied Hollywood institution for years to come.
