Dec. 22 (UPI) — Paramount Skydance amended its hostile bid to take over Warner Bros. Discovery, guaranteeing the backing of Larry Ellison.
“Larry Ellison has agreed to provide an irrevocable personal guarantee of $40.4 billion of the equity financing for the offer and any damages claims against Paramount,” the company said in a press release. Ellison also agreed not to revoke the Ellison family trust or adversely transfer its assets during the pendency of the transaction.
Last week, WBD urged its shareholders not to accept Paramount’s bid, saying it wasn’t backed by billionaire Larry Ellison, father of Paramount’s CEO.
WBD agreed to sell to Netflix but Paramount, which had been in a bidding war with Netflix, mounted a hostile bid.
Paramount didn’t raise its bid of $30 a share, saying it believes the bid is superior. But it did raise its proposed reverse breakup fee to match Netflix’s offer.
“What we’ve done in this amended filing is we’ve cleared the brush of obfuscation around the offer,” said Gerry Cardinale, founder and managing partner of RedBird Capital Partners, on CNBC’s Squawk Box on Monday.
RedBird is an investor in Paramount Skydance and has committed to financing the proposed purchase.
Cardinale said the bid is backed by 1.2 billion Oracle shares in an irrevocable trust.
“Like we’ve done through the six bids that we’ve made, we are being responsive to what their concerns are,” Cardinale said.
Warner Bros. Discovery shares jumped 4% in early trading Monday, while Paramount shares rose almost 6%, CNBC reported. Netflix shares dipped slightly.
“Paramount has repeatedly demonstrated its commitment to acquiring WBD. Our $30 per share, fully financed all-cash offer was on Dec. 4, and continues to be, the superior option to maximize value for WBD shareholders,” David Ellison said in a statement. “Because of our commitment to investment and growth, our acquisition will be superior for all WBD stakeholders, as a catalyst for greater content production, greater theatrical output, and more consumer choice. We expect the board of directors of WBD to take the necessary steps to secure this value-enhancing transaction and preserve and strengthen an iconic Hollywood treasure for the future.”