Paramount’s $108 billion bid for Warner Bros. Discovery has been reshaped Monday to address concerns raised by WBD’s board and to add a personal guarantee from Oracle CEO Larry Ellison.
Amended Bid Addresses Warner’s Concerns
The revised proposal seeks to satisfy the specific issues Warner’s board flagged against the original offer. Paramount maintains the $30 per share cash payment to shareholders, but the amendment introduces new financial safeguards.
Ellison’s Personal Guarantee and Trust Commitment
In a news release, Paramount announced that “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.” It also stated that “Mr. Ellison has agreed not to revoke the Ellison family trust or adversely transfer its assets during the pendency of the transaction.”
Financial Context of Ellison’s Guarantee
Ellison’s personal fortune, according to Bloomberg Billionaires, exceeds $240 billion, with a large portion tied to Oracle stock. The guarantee is intended to reassure Warner that the funding will be available if needed.
Record Break-up Fee
Paramount will raise the fee paid to WBD if the deal is terminated from $5 billion to $5.8 billion, matching the amount Netflix agreed to pay. This fee is among the largest ever offered in a merger break-up scenario.
Netflix Deal and Hostile Nature of the Bid
Warner Bros. Discovery is already moving forward with a sale of its television, movie and streaming assets to Netflix, making Paramount’s bid hostile. Paramount seeks to acquire all of WBD, whereas Netflix’s interest is limited to the film studio, streaming service and HBO network.
Warner’s Board Recommendation
Earlier that week, WBD’s board advised shareholders to reject Paramount’s hostile offer and reaffirmed its commitment to the earlier deal with Netflix. The board’s recommendation underscores the board’s preference for the Netflix transaction.
Di Piazza’s Commentary
On CNBC, WBD chairman Samuel Di Piazza said the board’s concerns centered on Ellison family backing. He added, “Nowhere in any of these proposals did Larry Ellison guarantee. Obviously, the ability to deal directly with Larry if there was an issue to close would be critical.”
Ellison Family and Trump Administration
The Ellison family claims it could secure regulatory approval from the Trump administration more easily than Netflix. Earlier this year, the family acquired Paramount Global with approval from the Trump administration, a process that involved CBS News agreeing to pay $16 million to President Donald Trump’s future presidential library over a 60 Minutes interview with then-candidate Kamala Harris.
CBS News Tensions
After the acquisition, Paramount CEO David Ellison installed Bari Weiss as editor-in-chief of CBS News and purchased her online news site, The Free Press. Tensions flared when Weiss pulled a 60 Minutes story titled “Inside CECOT” from Sunday’s broadcast, a decision she described in an email as “political,” not editorial. The email, obtained by The New York Times, read, “Our story was screened five times and cleared by both CBS attorneys and Standards and Practices. It is factually correct. In my view, pulling it now, after every rigorous internal check has been met, is not an editorial decision, it is a political one.”
Trump’s View on CNN and the Deal
A Warner Bros. Discovery takeover would give the Ellisons and Paramount control of CNN, a network frequently targeted by Trump. Trump has stated he will take a direct role in approving any Warner Bros. Discovery deal and recently told reporters that it is “imperative that CNN be sold.” He added, “I don’t think the people that are running that company right now…should be allowed to continue,” at a White House event on Dec. 10.
Trump’s Recent Criticism of the Ellisons
On Dec. 16, Trump posted on Truth Social that “For those people that think I am close with the new owners of CBS, please understand that 60 Minutes has treated me far worse since the so-called ‘takeover,’ than they have ever treated me before.” He concluded, “If they are friends, I’d hate to see my enemies!”
Key Takeaways
- Paramount’s $108 billion bid now includes a $40.4 billion personal guarantee from Larry Ellison.
- The break-up fee has been raised to $5.8 billion, matching Netflix’s fee.
- Warner’s board recommends rejecting the hostile offer and remains committed to the Netflix transaction.
Paramount’s intensified bid, coupled with Ellison’s personal guarantee and a record break-up fee, has set the stage for a high-stakes battle over Warner Bros. Discovery, while regulatory and media dynamics involving the Ellison family and Trump add further complexity to the deal.
