Larry Ellison offers US$40.4 billion guarantee to beef up Paramount’s Warner Bros bid

[LOS ANGELES] Oracle co-founder Larry Ellison will provide a personal guarantee of US$40.4 billion in equity financing to back Paramount Skydance’s all-cash US$108.4 billion bid for Warner Bros Discovery, a regulatory filing showed on Monday (Dec 22).

The guarantee aims to address Warner Bros board’s doubts over Paramount’s deal financing and the lack of a full backing from the Ellison family, which had led the company to prefer a cash-and-stock deal with Netflix.

Paramount said the amended terms do not change the US$30-per-share all-cash offer. Warner Bros shares rose nearly 4 per cent in premarket trading, while Paramount Skydance added about 3 per cent.

Warner Bros and Netflix did not immediately respond to requests for comment.

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.

“Paramount remains in a precarious position and is making a last-ditch effort to avoid being left out in the shadows,” said Paolo Pescatore, analyst at PP Foresight. “The improved offer is a step in the right direction, but it is unlikely to be enough.”

As part of the revised terms, Ellison also agreed not to revoke the family trust or transfer its assets during the pendency of the transaction, the filing showed.

Paramount said it has raised its regulatory reverse termination fee to US$5.8 billion from US$5 billion to match the competing transaction and extended the expiration date of its tender offer to Jan 21, 2026.

The bid follows Warner Bros asking its shareholders to reject the US$108.4 billion offer from Paramount for the whole company, including cable TV assets, on doubts over its financing and the lack of a full guarantee from the Ellison family.

But Warner Bros investors, including the fifth largest shareholder Harris Associates, have said they would be open to revised offers from Paramount if it presents a superior bid and addresses issues with deal terms.

For either suitor, winning shareholder support is only the first hurdle, as both deals would face intense antitrust scrutiny in the US and Europe.

Lawmakers from both parties have raised concerns about consolidation in the media industry, and US President Donald Trump has said he plans to weigh in on the transactions.

A Paramount-Warner Bros combination would create a studio larger than industry leader Disney and combine two major television operators, a move some Democratic senators say would give one company control over “almost everything Americans watch on TV.”

A Netflix-Warner Bros tie-up would cement Netflix’s dominance in streaming, creating a group with a combined 428 million subscribers. Netflix has said it would honor Warner Bros’ theatrical commitments and argued the deal would benefit consumers by lowering costs through bundled offerings.

Netflix co-CEO Ted Sarandos has said he is confident the deal would win regulatory approval, arguing it would avoid job cuts in an industry already struggling with uneven box-office returns. REUTERS