Oracle co-founder Larry Ellison has agreed to provide a personal guarantee of $40.4 billion of the equity financing for Paramount Skydance Inc.’s offer to acquire Warner Bros. Discovery.
Paramount, controlled by Ellison’s son David Ellison said the amended terms do not change the $30-per-share all-cash offer. Earlier, Netflix Inc. said that it has refinanced part of a $59 billion bridge loan to support its potential acquisition of Warner Bros.
The bidding war for Hollywood’s most prized assets shows no sign of ending soon as the winner will gain a big advantage in the streaming wars by locking up a deep content library that has long been the target of blockbuster deals.
Netflix agreed to a deal in early December that values Warner Bros.’ studio and streaming assets at $82.7 billion. Paramount Skydance Corp. subsequently launched a hostile takeover offer, sparking a bidding war that will reshape the entertainment industry regardless of the winner. The rival bids entail multi-billion-dollar debt deals that rank among the largest in the past decade.
Warner Bros. last week advised its shareholders to reject the Paramount bid in favour of its original agreement with Netflix. Warner Bros. Discovery described Paramount’s offer for the entire company, which includes $54 billion in debt commitments, as “inferior and inadequate”, and said the deal’s financing was too risky.
While Netflix has the support of Warner Bros.’ board, it faces regulatory and political hurdles to get the acquisition over the line.
Democratic Senator Elizabeth Warren of Massachusetts has branded the bid as an “anti-monopoly nightmare”, and Netflix has moved to reassure staff that it won’t result in studio closures.
