Paramount Responds To WBD Concerns About Hostile Bid, Offering New Larry Ellison Financing Guarantee

Paramount has amended its hostile bid for Warner Bros. Discovery, adding an “irrevocable personal guarantee” from Larry Ellison in support of the $108 billion proposal.

WBD had raised a range of concerns about the offer, noting it had already formally accepted a bid from Netflix for $82.7 billion.

Ellison, one of the world’s richest men, has long been a backer of Skydance, which is run by his son, David. While he is a participant in the proposed WBD transaction, the board of WBD had expressed worry that it was via a trust that could be manipulated in unknown ways.

“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,” Paramount said in an SEC filing.

The company also said it was upping its breakup fee – the amount it would pay if a deal does not materialize – to $5.8 billion from $5 billion, matching Netflix. Larry Ellison has also agreed not to revoke the Ellison family trust, Paramount said, or “adversely transfer its assets during the pendency of the transaction.”

Paramount has also affirmed that the Ellison family trust owns about 1.16 billion shares of Oracle common stock. It added that “all material liabilities” of the Ellison family have been publicly disclosed.

The battle to control WBD will reshape the entertainment landscape regardless of who prevails. Both suitors also are likely to invite a high degree of scrutiny from regulators. Just weeks before its chase of WBD became public, Paramount had closed a long-gestating deal to merge with Skydance.

MORE to come …