Warner Bros. Discovery Inc. is expected to Paramount Skydance’s hostile bid despite a $40-billion personal guarantee from billionaire Larry Ellison, CNBC reported on Tuesday.
The decision could keep Warner Bros on track to pursue a rival cash-and-stock deal with Netflix Inc., underscoring broad concerns over valuation, strategic fit and deal certainty despite Paramount’s attempt to sweeten its offer.
The development is the latest in an intense battle for one of Hollywood’s most storied studios, with both Netflix and Paramount pulling out all the stops.
On 6 December, Netflix announced that it has agreed to acquire Warner Bros. for an enterprise valuation of $82.7 billion—a deal that had the backing of the Warner Bros. board of directors. The deal includes the HBO Network, but not cable TV channels such as CNN, TBS and TNT.
On 9 December, Paramount Skydance made a hostile bid worth $108.4 billion, which Warner Bros. was reportedly not in favour of. The $30/share cash offer includes financing from Jared Kushner’s Affinity Partners and is backstopped by the Ellison family. Larry Ellison, the world’s second-richest person, is the father of Paramount head David Ellison and has close ties to the White House.
On 22 December, Larry Ellison agreed to provide a personal guarantee of $40.4 billion of the equity financing for Paramount ‘s offer to acquire Warner Bros.