Ellison Personally Guarantees Paramount’s $40.4 Billion Bid for Warner Bros
Oracle co-founder Larry Ellison has stepped in to personally guarantee financing for Paramount Skydance’s $40.4 billion bid to acquire Warner Bros Discovery, strengthening the media company’s offer against rival bidder Netflix. The move, disclosed in a regulatory filing on Monday, aims to reassure Warner Bros’ board about Paramount’s funding capacity and the full backing of the Ellison family.
Paramount Raises Termination Fee, Keeps Offer Unchanged
Despite the guarantee, Paramount said it is maintaining its all-cash offer of $30 per share. It also increased its regulatory reverse termination fee from $5 billion to $5.8 billion to match the breakup fee included in Netflix’s competing bid. The expiration date of Paramount’s tender offer has been extended to 21 January 2026.
As part of the revised terms, Ellison agreed not to revoke or transfer assets from the family trust while the transaction is pending. Paramount’s renewed offer follows Warner Bros’ earlier recommendation for shareholders to reject Paramount’s $108.4 billion full-company bid, citing doubts about financing and the absence of a complete Ellison family guarantee.
Following the announcement, Warner Bros shares rose 3.5%, while Paramount’s stock gained more than 4%. Warner Bros said it would review the revised offer but noted that its board had not changed its recommendation in favour of the Netflix deal. Netflix declined to comment.
Shareholder and Analyst Reactions
Market analysts suggest the personal guarantee may not significantly sway undecided shareholders. “I doubt many Warner Bros shareholders that are on the fence or planning to vote no were holding out due to issues the revised bid addresses such as a guarantee from Larry Ellison on the funding front,” said Seth Shafer, principal analyst at S&P Global.
However, some investors remain open to discussions. Harris Associates, Warner Bros’ fifth-largest shareholder, indicated a willingness to consider a stronger bid from Paramount if it addressed concerns about deal structure and financing.
Under the Netflix agreement, Warner Bros would owe Netflix a $2.8 billion breakup fee should it withdraw from the deal.
Regulatory and Political Hurdles Ahead
Regardless of which suitor prevails, the potential merger faces significant regulatory scrutiny in both the United States and Europe. Lawmakers across party lines have raised concerns about further consolidation in the entertainment industry.
A merger between Paramount and Warner Bros would create a media powerhouse larger than Disney, combining two major studios and several leading television networks. Critics warn such a merger could give one entity outsized control over U.S. entertainment.
Alternatively, a Netflix-Warner Bros tie-up would establish the largest streaming platform globally, with a combined 428 million subscribers. Netflix has pledged to preserve Warner Bros’ theatrical slate and said the merger would reduce costs for consumers through bundled offerings. Co-CEO Ted Sarandos has expressed confidence that regulators will approve the deal, citing the company’s commitment to avoiding job cuts amid a volatile film market.
with inputs from Reuters