1. Paramount amended its $30 per share all-cash offer for WBD. 2. Larry Ellison provides a $40.4 billion personal guarantee for the offer. 3. Paramount increases regulatory reverse termination fee to $5.8 billion. 4. WBD's board ignored concerns about Paramount's financing before accepting Netflix's offer. 5. Paramount's offer aims to enhance content production and shareholder value.
FAQ
Why Bullish?
The increase in the personal guarantee and revised offer signals strong commitment and readiness, which could provide a competitive edge. Historically, firm backing from influential investors like Ellison can inspire confidence and potentially elevate stock performance.
How important is it?
The article provides significant updates regarding an acquisition that emphasizes Paramount's strategic positioning. It displays ongoing negotiations and competitive dynamics in the entertainment sector which could influence PSKY's market perception and investment outlook.
Why Short Term?
The implications of the revised offer are likely to impact PSKY's share price as WBD shareholders assess and react shortly. Immediate analysis of the offer’s attractiveness to WBD shareholders could lead to quick shifts in trading patterns and market reaction.
Paramount Amends $30 Per Share All-Cash Offer for Warner Bros. Discovery, Inc.
Paramount Skydance Corporation (NASDAQ: PSKY) has announced an amendment to its $30 per share all-cash offer for Warner Bros. Discovery, Inc. (NASDAQ: WBD). This updated offer aims to alleviate concerns expressed by WBD regarding Paramount's previously stated superior proposal. Paramount remains committed to acquiring 100% of the outstanding shares of WBD, along with all associated assets and liabilities.
Addressing Concerns Raised by WBD
In a recent filing on December 17th, WBD highlighted concerns regarding the sufficiency of the equity backstop from the Ellison family trust, linked to Paramount's December 4th proposal and its December 8th tender offer. WBD indicated that a personal guarantee from Larry Ellison was necessary, despite there being no prior mention of such demands during the 12 weeks leading to WBD's agreement with Netflix, Inc. (NASDAQ: NFLX).
To counter these concerns, Paramount is now providing several enhancements to its offer:
- Irrevocable Personal Guarantee: Larry Ellison has agreed to an irrevocable personal guarantee of $40.4 billion for the equity financing of the offer and related damages claims.
- Revocable Trust: Mr. Ellison will not revoke the Ellison family trust during the transaction.
- Trust Assets: Paramount confirms that the Ellison family trust owns approximately 1.16 billion shares of Oracle common stock, with all material liabilities disclosed.
- Transaction Terms: The revised merger agreement provides greater flexibility for WBD concerning debt refinancing and operational covenants.
- Regulatory Termination Fee: Paramount is increasing its regulatory reverse termination fee from $5 billion to $5.8 billion.
- Conditions: The offer stipulates that WBD must maintain ownership of its Global Networks business.
Financial Comparisons and Transparency Issues
WBD's Schedule 14D-9 filing has been criticized for lacking comprehensive details on the financial reasoning for rejecting Paramount's offer in favor of Netflix's. Notably, the filing does not disclose any valuation on the Global Networks stub equity, which Paramount estimates to be worth $1 per share.
Moreover, the Netflix transaction purportedly contains adjustments based on net debt that remain unclear. WBD shareholders deserve clarity on these calculations to make informed decisions regarding the worth of the Netflix offer relative to Paramount's cash proposal.
Commitment from Paramount Leadership
David Ellison, Chairman and CEO of Paramount, stated, “Paramount has repeatedly demonstrated its commitment to acquiring WBD. Our $30 per share, fully financed all-cash offer continues to be the superior option for maximizing value for WBD shareholders.” He emphasized that this acquisition would lead to increased production, more theatrical releases, and greater consumer choice.
Tender Offer Details and Next Steps
In light of this enhanced offer, Paramount’s direct subsidiary, Prince Sub Inc., will extend the expiration date of its tender offer to 5:00 p.m. on January 21, 2026, unless extended. As of December 19, 2025, Equiniti Trust Company reported that 397,252 shares had been validly tendered.
WBD shareholders looking for additional information about the tender offer are encouraged to contact Okapi Partners LLC at toll-free at (844) 343-2621. Paramount urges shareholders to support its superior offer by tendering their shares promptly.
About Paramount
Paramount, a Skydance Corporation, is a leading media and entertainment company with three primary segments: Filmed Entertainment, Direct-to-Consumer, and TV Media. Its diverse portfolio includes iconic brands such as Paramount Pictures, CBS, Nickelodeon, and Showtime.
Forward-Looking Statements
This communication contains both historical and forward-looking statements regarding Paramount's future performance and potential achievements. Such statements may include terms like “expect,” “anticipate,” and “believe,” reflecting management’s current expectations and involve inherent risks and uncertainties that could cause actual results to differ.