The war for the future of Warner Brothers continues. Paramount Skydance announced an amended all-cash offer for the legacy movie studio on Monday. The new offer includes an irrevocable personal guarantee from Oracle billionaire Larry Ellison to provide tens of billions in equity financing for the deal. This is the latest move by his son, David Ellison, the CEO of Paramount Skydance, to pry the potential acquisition loose from his competition, the streaming giant Netflix.
A Paramount press release published Monday states that Larry Ellison has agreed to personally guarantee $40.4 billion of the equity financing for the offer. The proposed equity financing had been part of the previous offer, but the elder Ellison’s personal guarantee is a new addition.
This revamped offer comes just one week after the Warner Bros. Discovery board rejected Paramount’s initial bid, favoring a previous deal with Netflix instead. That Netflix deal was announced on December 5. It outlined how the streamer would purchase the movie studio via a cash and stock option valued at $27.75 per share, with 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 Warner Bros. Discovery board rejected this offer, calling it illusory and claiming Paramount had misled shareholders about the proposed deal’s financing. At the time, the board noted its deal with Netflix was a binding agreement with enforceable commitments, requiring no equity financing.
Paramount says its amended offer has been designed to address Warner Bros. Discovery’s stated concerns regarding Paramount’s superior offer. Reports from October indicated that, prior to the Netflix deal, Warner Bros. Discovery had previously rejected three different takeover offers from Paramount.
Paramount Skydance CEO David Ellison stated in Monday’s press release that the company has repeatedly demonstrated its commitment to acquiring Warner Bros. Discovery. He called their $30 per share, fully financed all-cash offer the superior option to maximize value for shareholders. Ellison said their acquisition would be a catalyst for greater content production, greater theatrical output, and more consumer choice.
He added that they expect the board of directors of Warner Bros. Discovery to take the necessary steps to secure this value-enhancing transaction and preserve an iconic Hollywood treasure for the future.