American producer David Ellison arrives for the premiere of Paramount’s “Transformers: Rise Of The Beasts” in New York on June 5, 2023.
Angela Weiss | Afp | Getty Images
Paramount Skydance Guaranteed the support of billionaire Larry Ellison on Monday in a modified bid for Discovery of Warner Bros. — a clear response to the questions raised by the WBD Board of Directors.
“Larry Ellison has agreed to provide an irrevocable personal guarantee of $40.4 billion from the equity financing for the offering and any claims for damages against Paramount,” the company said in a press release.
Paramount said Ellison, the father of Paramount CEO David Ellison, also agreed not to revoke the Ellison family trust or adversely transfer its assets during a pending transaction.
Paramount Skydance offers $30 per share, all cash, to Warner Bros. Discovery in a hostile attempt to rival a deal with Netflix.
Last week, the president of Warner Bros. Discovery CEO Samuel Di Piazza told CNBC’s David Faber that the board was concerned about Oracle co-founder Larry Ellison’s supposed support in the bid.
“We weren’t sure that one of the richest people in the world would be there at the closing,” Di Piazza said at the time. “Making a deal is good; making a deal is better.”
WBD agreed earlier this month to sell its studios and streaming assets to Netflix in a deal valued at approximately $83 billion on a commercial basis. Paramount wants to buy all of WBD, including its portfolio of television networks, and says its offer has an enterprise value of $108.4 billion.
Paramount notably did not increase its offer Monday, reiterating that it believes the deal is superior, although Paramount increased its proposed reverse breakup fee to match that of Netflix’s offer.
“What we’ve done in this amended filing is we’ve eliminated any confusion around the offering,” Gerry Cardinale, founder and managing partner of RedBird Capital Partners, said Monday on CNBC’s “Squawk Box.”
RedBird is an investor in Paramount Skydance and has also committed to financing Paramount’s proposed acquisition of WBD.
“As we did with the six offers we made, we are addressing their concerns,” Cardinale said.
Warner Bros. shares Discovery rose 4% in pre-market trading Monday, while Paramount shares gained 3%. Netflix shares remained stable.