US film producer David Ellison arrives for Paramount’s “Transformers: Rise Of The Beasts” premiere in New York City on June 5, 2023.
Angela Weiss | Afp | Getty Images
Paramount Skydance on Monday guaranteed the backing of billionaire Larry Ellison in an amended offer for Warner Bros. Discovery — a clear response to questions raised by the WBD board of directors.
“Larry Ellison has agreed to provide an irrevocable personal guarantee of $40.4 billion of the equity financing for the offer and any damages claims against Paramount,” the company said in a news release.
Paramount said Ellison, the father of Paramount CEO David Ellison, has also agreed not to revoke the Ellison family trust or adversely transfer its assets during a pending transaction.
Paramount Skydance is offering $30 per share, all cash, for Warner Bros. Discovery in a hostile attempt that’s meant to rival an agreement with Netflix.
Last week, Warner Bros. Discovery chairman Samuel Di Piazza told CNBC’s David Faber the board had concerns about the supposed backing of Oracle co-founder Larry Ellison in the bid.
“We were not confident that one of the richest people in the world would be there at closing,” Di Piazza said at the time. “Doing a deal is great; closing a deal is better.”
WBD earlier this month agreed to sell its studio and streaming assets to Netflix in a transaction valued at roughly $83 billion on an enterprise basis. Paramount wants to buy the entirety of WBD, including its portfolio of TV networks, and says its offer comes with an enterprise value of $108.4 billion.
Paramount notably did not increase its bid on Monday, reiterating that it believes the deal is superior, though Paramount did increase its proposed reverse breakup fee to match that of Netflix’s offer.
“What we’ve done in this amended filing is we’ve cleared the brush of obfuscation around the offer,” said Gerry Cardinale, founder and managing partner of RedBird Capital Partners, on CNBC’s “Squawk Box” on Monday.
RedBird is an investor in Paramount Skydance and has also committed to financing the proposed Paramount acquisition of WBD.
“Like we’ve done through the six bids that we’ve made, we are being responsive to what their concerns are,” Cardinale said.
Shares of Warner Bros. Discovery rose 4% in premarket trading Monday, while shares of Paramount gained 3%. Shares of Netflix were flat.
