Paramount renews bid for Warner Bros, ensuring $40B Larry Ellison backing

Summary

The war for the future of Warner Brothers continues, as Paramount Skydance announced Monday an amended all-cash offer for the legacy movie studio. The offer includes an “irrevocable personal guarantee” from a major backer, Oracle billionaire Larry Ellison, to provide tens of billions in equity financing for the deal. It’s the latest move by Ellison’s son, David Ellison — the CEO of Paramount Skydance — to pry the potential acquisition loose from his competition, the streaming giant Netflix. “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,” a Paramount press release published Monday states. The proposed equity financing had previously been included in Paramount’s offer, but the elder Ellison’s “personal guarantee” is new, the press release states. The revamped offer comes a mere week after the WBD board rejected Paramount’s initial bid, favoring, instead, a previous deal with Netflix. That deal was announced on December 5, outlining how the streamer would purchase the movie studio via a cash and stock option valued at $27.75 per WBD share, and a total enterprise value of $82.7 billion. Three days after the Netflix deal was announced, Paramount launched a hostile bid valued at $108.4 billion, offering $30 per share. The WBD board rejected this offer, calling it “illusory” and claiming that Paramount had misled shareholders about the proposed deal’s financing. At the time of the rejection, the board noted that the deal with Netflix was “a binding agreement with enforceable commitments, with no need for any equity financing and robust debt commitments.” Now, Paramount’s amended offer has been designed to “address WBD’s stated concerns regarding Paramount’s superior offer,” Paramount said. In October, CNBC reported that, prior to the Netflix deal, WBD had previously rejected three different takeover offers from Paramount. “Paramount has repeatedly demons...