Topline
Paramount amended its hostile takeover bid for Warner Bros. Discovery on Monday and said Larry Ellison has made an “irrevocable” financial backing of $40 billion, after the media conglomerate said it would only consider the offer if the world’s third-richest person guaranteed his investment.
Warner Bros. Discovery requested a guarantee from the world’s third-richest person after Paramount’s hostile takeover offer.
2013 Invision
Key Facts
Ellison agreed to provide an “irrevocable personal guarantee of $40.4 billion” to finance Paramount’s $108 billion offer for Warner Bros. Discovery, Paramount said in a statement, noting Ellison would not revoke his family trust or transfer its assets during the transaction.
In a Securities and Exchange Commission filing last week, Warner Bros. Discovery questioned whether the full Ellison family trust would remain committed to Paramount’s bid, suggesting the family has “no obligation” to cooperate, but noted a “personal guarantee” from Ellison would be sufficient.
A guarantee from Ellison, the father of Paramount Skydance CEO David Ellison, would address Warner Bros. Discovery’s “amorphous need for ‘flexibility’ in interim operations,” Paramount said.
As part of its amended offer, Paramount said it would pay Warner Bros. Discovery $5.8 billion, up from $5 billion, should the transaction fail to go through
Forbes Valuation
Oracle chairman Larry Ellison is the world’s third-richest person with a net worth estimated at $242.7 billion as of Monday morning. He previously ranked as the second-richest behind Tesla CEO Elon Musk, after Oracle shares skyrocketed in October, making Larry Ellison the second person ever worth $400 billion. Musk’s fortune is estimated at $748.9 billion, roughly three times more than Larry Ellison’s net worth.
Tangent
Netflix, whose $83 billion offer for Warner Bros. Discovery was approved days before Paramount’s hostile takeover bid, said Monday it would secure up to $25 billion in bank financing to fund its acquisition. Netflix’s bank loans leave the company with an additional $34 billion in financing, which would be sold by BNP Paribas, Wells Fargo and HSBC, among others, as bonds.
Key Background
Warner Bros. Discovery urged its shareholders to reject Paramount’s offer of $30 a share for the company, claiming the David Ellison-led takeover bid was “inferior” to Netflix’s. Warner Bros. Discovery chair Samuel DiPiazza said the board conducted a review of Paramount’s offer and argued it provided “inadequate” value, imposed “numerous, significant risks and costs on WBD” and included a $40.6 billion equity offer for which DiPiazza said there was “no Ellison family commitment of any kind.” Paramount disputed the statement, arguing its bid “clearly offers WBD shareholders superior value and certainty,” as well as a “clear path to close” with regulators with backing from the Ellison family. Paramount has reportedly criticized Warner Bros. Discovery’s sale process, labeling the company’s tactics as “tainted” as Paramount’s attorneys allege Warner’s board had “embarked on a myopic process with a predetermined outcome that favors a single bidder.”
Further Reading
ForbesParamount Offered David Zaslav Pay Package Of ‘Several Hundred Million Dollars’ In Ellison-Backed BidBy Ty RoushForbesParamount Stands By Hostile $108 Billion Takeover Bid For Warner Bros. Discovery Despite RejectionBy Siladitya Ray
