Paramount is building out its $108 billion Warner Bros Discovery bid to include a $40 billion guarantee from Larry Ellison.
The billionaire father of Paramount chief executive David Ellison put up the sum on Monday, a regulatory filing showed.
The move was made in clear response to concerns aired by Warner Bros Discovery’s board last week, when shareholders voted to reject the deal.
A $40.65 billion equity commitment from Paramount that relied ‘on an unknown and opaque revocable trust’ sat high on the list of the board’s complaints.
Paramount has since confirmed what the SEC filing indicated, saying in a press release that the elder Ellison had ‘agreed to provide an irrevocable personal guarantee’ that makes him fully responsible.
Previously, the details present in Paramount’s equity commitment did not offer a ‘full backstop’ from the Ellison family.
It is now insured by the elder Ellison’s entire $240 billion fortune rather than a revocable trust, the company said.
Warner, led by chief executive David Zaslav, is now expected to respond to the new-and-improved offer later today, The New York Post reported.
Paramount appeared to take a shot at Warner’s board’s on Monday, after members maintained a ‘revocable trust is no replacement for a secured commitment.’
The company noted how 81-year-old Oracle founder Ellison holds the majority of the trust’s assets and that Warner had not previously asked for a personal guarantee.
‘Paramount is publishing records confirming that the Ellison family trust owns approximately 1.16 billion shares of Oracle common stock and that all material liabilities of the Ellison family trust are publicly disclosed,’ the company said.
The offer still clocks in at $30-a-share and values Warner at $108.4billion.
It comes in contrast to a competing $82.7 billion offer from Netflix, which is a mix of cash and stock. The streamer’s bid is only for Warner’s studio and streaming business, whereas Paramount wants declining cable assets like CNN as well.
The elder Ellison – an outspoken Donald Trump ally – floated firing some of CNN’s top talent if his son is able to acquire Warner Bros Discovery during calls with White House officials, sources told the Guardian last month.
He also reportedly pondered a programming change that would put CBS’s 60 Minutes on CNN.
His son, in his first speech as Paramount boss in July, aired plans to return the studio to its glitzy glory days by building on already popular franchises.
Paramount is now giving Warner shareholders until January 21 to ‘tender’ their shares.
The younger Ellison wrote Monday that Paramount’s offer ‘continues to be, the superior option to maximize value for WBD shareholders.’
Ellison told CNBC last week he had already told WBD boss Zaslav that his bid is not the company’s ‘best and final’ offer, suggesting a larger one could be on the horizon.
Zaslav formally rejected Paramount’s old offer on Wednesday, accepting Netflix’s. He was seen posing for photos with Netflix co-CEOs Greg Peters and Ted Sarandos while giving them a tour of Warner Bros’ facilities in Los Angeles.
