UK (Parliament Politics Magazine) – Paramount Skydance on Monday guaranteed billionaire Larry Ellison’s backing in its amended offer for Warner Bros. Discovery, addressing board concerns.
According to Paramount, Ellison, the father of Paramount CEO David Ellison, has also promised not to negatively transfer its assets or revoke the Ellison family trust while a deal is still underway.
“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.
In an aggressive attempt to compete with a deal with Netflix, Paramount Skydance is giving Warner Bros. Discovery $30 per share, all cash.
Samuel Di Piazza, chairman of Warner Bros. Discovery told David Faber of CNBC last week that the board was worried about Oracle co-founder Larry Ellison’s alleged support for the deal.
“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.”
Earlier this month, WBD reached an agreement to sell Netflix its studio and streaming assets for an enterprise value of about $83 billion. With an enterprise value of $108.4 billion, Paramount claims to be interested in purchasing WBD in its entirety, including its TV network portfolio.
Despite raising its proposed reverse separation fee to match Netflix’s offer, Paramount notably did not raise its proposal on Monday, insisting that it thinks the arrangement is better.
RedBird has pledged to fund the proposed Paramount acquisition of WBD in addition to being an investor in Paramount Skydance.
“Like we’ve done through the six bids that we’ve made, we are being responsive to what their concerns are,”
Cardinale said.
Warner Bros. Discovery’s stock increased 4% during premarket trade on Monday, while Paramount’s stock increased 3%. Netflix’s stock was unchanged.
How would this deal affect CNN and other linear TV assets?
A Paramount Skydance accession of Warner Bros. Discovery would probably accelerate divestitures or spin- offs of direct television means like CNN, TNT, and Discovery channels, prioritizing streaming solidarity over declining string profit.
CNN, a crucial WBD asset under scrutiny in deals like Netflix’s previous Warner shot, faces editorial shifts or outright trade amid Trump’s calls for new power; Paramount’s Ellison has pledged changes, potentially altering its independence in a post-merger reality.
Channels similar as HGTV, TLC, and Cartoon Network threaten speeding into a” SpinCo” reality for shareholder distribution or third- party deals( e.g., Starz flings), segregating them from high- value workrooms streaming while exposing them to cord- slice pressures.