Larry Ellison backs Paramount’s $40.4B offer for Warner Bros.

Paramount Skydance announced on Monday an amended all-cash offer to acquire Warner Bros. Discovery. The revised bid is backed by a new, irrevocable personal guarantee of $40.4 billion from Oracle billionaire Larry Ellison to secure the equity financing. This personal guarantee represents a binding financial commitment from an individual, covering both the equity financing for the offer and any potential damages claims against Paramount. The move is the latest attempt by Paramount Skydance CEO David Ellison to secure the acquisition against competing bidder Netflix.

The amended bid is designed to challenge a pending acquisition agreement between Warner Bros. Discovery and Netflix. The Netflix deal, announced on December 5, is a cash and stock option valued at $27.75 per share, representing a total enterprise value—the total value of a company’s assets—of $82.7 billion. Paramount’s hostile bid, originally launched on December 4, offers $30 per share, valuing the transaction at $108.4 billion. Prior to this latest move, the Warner Bros. Discovery board had reportedly rejected three different takeover offers from Paramount, as reported by CNBC in October.

To compare the competing proposals:

• Paramount Skydance Offer: $30 per share, representing a total hostile bid value of $108.4 billion, fully financed in cash and backed by Larry Ellison’s $40.4 billion personal guarantee.
• Netflix Agreement: $27.75 per share, representing a total enterprise value of $82.7 billion, structured as a cash and stock option.

The Warner Bros. Discovery board previously rejected Paramount’s initial bid in favor of the Netflix agreement. During that rejection, the board characterized Paramount’s approach as a “hostile bid” and labeled the offer “illusory.” Furthermore, the board reported that Paramount had “misled shareholders” regarding the financing of the proposed deal, noting that the Netflix agreement was binding and did not require equity financing. Paramount stated that its newly amended offer is specifically designed to address these concerns.

Paramount Skydance CEO David Ellison defended the revised proposal. “Paramount has repeatedly demonstrated its commitment to acquiring WBD,” Ellison said. He stated that the $30 per share all-cash offer remains the superior option to maximize value for Warner Bros. Discovery shareholders, and that the acquisition would act as a catalyst for greater content production, theatrical output, and consumer choice. He added that the company expects the board to take the necessary steps to secure the transaction.

Why it matters

Paramount Skydance is attempting to outbid Netflix for Warner Bros. Discovery by introducing a new, fully financed all-cash offer backed by an irrevocable personal guarantee from Larry Ellison.