Warner Bros. Discovery plans to reject Paramount’s revised takeover proposal despite billionaire Larry Ellison’s agreement to provide an “irrevocable personal guarantee” backing the $108 billion hostile bid, TheWrap has learned.
Paramount adjusted its hostile takeover bid last week to reassure shareholders of its financing and raise its breakup fee to $5.8 billion.
WBD’s board still views its $83 billion deal with Netflix as the better offer, according to the Financial Times. The board has not made a final decision.
The amended offer comes after WBD’s board rejected its all-cash, $30 per share bid, calling it “inadequate” and “illusory.” The bid marked its sixth proposal made over the course of twelve weeks.
Paramount’s sixth bid includes a total of $40.7 billion in equity financing, including $11.8 billion from the Ellison family and $24 billion from Saudi Arabia’s Public Investment Fund, the Qatar Investment Authority and Abu Dhabi’s L’imad Holding Company, according to a filing with the U.S. Securities and Exchange Commission. Kushner’s Affinity Partners had contributed $200 million prior to backing out, according to the New York Times. At the time, the Ellisons and Gerry Cardinale’s RedBird Capital Partners agreed to fully backstop 100% of the equity financing through the Ellison family trust.
It also includes $54 billion in committed debt financing from Bank of America, Citibank and Apollo Global Management. Roughly $17 billion had been reserved to allow WBD to extend an existing bridge loan.
A spokesperson for Warner Bros. Discovery did not immediately return TheWrap’s request for comment.
Bloomberg first reported the news.