Paramount beefs up its offer for Warner Brothers with the support of Larry Ellison, providing a personal guarantee of USD 40 bn for the intended takeover of Warner Brothers Discovery.
As such, Paramount has improved on its hostile takeover offer of Warner Brothers. This is while it wrestles with Netflix to take control of the movie studio, streaming service, and cable operator.
Paramount is now offering a personal financial guarantee worth more than USD 40bn from Oracle chairman, Larry Ellison. Larry is the father of Paramount CEO David Ellison. This guarantee is designed to resolve doubts about Paramount’s financing offer.
It is also beefing up its reverse breakup fee (payable only if Paramount is unsuccessful in having the deal approved by the regulators) to USD 5.8bn to match Netflix’s value.
On December 22, the improved terms came less than a week after Warner Bros. rejected Paramount’s USD 108.4 billion bid, worth USD 30 per share, in favour of Netflix’s USD 72 billion deal.
David Ellison is urging Warner Brothers to accept his proposal instead, saying that Paramount has repeatedly demonstrated its commitment to acquiring WBD. The USD 30 per share was a fully financed all-cash offer that was on 4 December.
It continues to be a superior option to maximise value for WBD shareholders. With Paramount’s commitment to investment & growth, the acquisition will be superior for all WBD stakeholders.
This moves as a catalyst for greater content production and enhanced theatrical output, besides more consumer choice. Paramount expects the board of directors of WBD to take the necessary steps in securing this value-enhancing transaction. Additionally, they aim to preserve and strengthen an iconic Hollywood treasure for the future.
Paramount said it was attempting to tackle WBD’s amorphous need for financial flexibility, so it bluntly denied the view that Netflix’s offer was superior.
