Paramount Skydance has changed its offer for Warner Bros. Discovery, with a new proposal that now includes a personal financial guarantee from Oracle Chairman Larry Ellison, as it attempts to outbid a rival offer from Netflix. Ellison, one of the world’s richest people and father of Paramount CEO David Ellison, agreed to provide an irrevocable personal guarantee of $40.4 billion to support Paramount’s proposed $108.4 billion bid for Warner Bros., according to a statement.
Ellison’s new guarantee aims to allay Warner Bros. board’s doubts. regarding Paramount’s lack of funding and lack of full support from the Ellison family. Precisely, the absence of irrevocable commitment from Larry Ellison was one of Warner’s arguments for forcefully rejecting Paramount’s offer and asking its shareholders to support Netflix. Larry Ellison has now agreed not to revoke the Ellison family trust or transfer its assets while the transaction is pending. Paramount’s offering price of $30 per share remains unchanged.
Paramount has confirmed that the Ellison family trust owns approximately 1.16 billion shares of Oracle common stock. The company also proposed increasing its severance package from $5 billion to $5.8 billion. “In an effort to address Warner Bros.” “In the event of a vague need for flexibility, Paramount’s revised merger agreement provides greater flexibility for Warner Bros. “Paramount said in a statement.
Paramount wants to acquire Warner Bros. for months, and the battle for one of Hollywood’s most historic studios has taken an increasingly acrimonious turn. The board of directors of Warner Bros. reached a deal earlier this month with Netflix for $82.7 billion to sell the assets of streaming and study. Paramount then launched a hostile takeover bid in a direct appeal to shareholders.
Warner Bros.’ The board urged shareholders to reject Paramount’s offer, which includes $54 billion in debt commitments, calling it “inferior” and “inadequate.” The board was particularly critical of the financial uncertainty and implied risk posed by the revocable trust structure, meaning Paramount could terminate the deal at any time.
Paramount, controlled by the Ellisons, is competing with the world’s most valuable entertainment company, Netflix, to acquire Warner Bros., one of Hollywood’s most historic studios, as well as HBO, one of the television industry’s crown jewels. Executives at Paramount and Netflix argued that they would be the best owners and would use Warner Bros. coveted library to boost their film operations. streaming.
In its letter to shareholders and a detailed 94-page regulatory filing last week, Warner Bros. highlighted the risks of Paramount’s offer, including what the company described as the Ellison family’s inability to secure its capital commitment. The capital is backed by “an unknown and opaque revocable trust,” the board said. The documents provided by Paramount “contain legal loopholes and limitations that endanger you, our shareholders and our company,” the report added.
Netflix also announced Monday that it had refinanced part of a $59 billion bridge loan with cheaper, longer-term debt, strengthening the financing package supporting its bid for Warner Bros.
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