As expected, Paramount isn’t backing down. If anything, it’s pushing harder, trying to force Warner Bros. Discovery into a corner — and this time it’s playing its biggest card yet.
On Monday, Paramount rolled out a revised hostile bid and, in the process, brought Larry Ellison fully into the picture. The Oracle founder, and father of Paramount CEO David Ellison, has agreed to personally guarantee the entire $40.4 billion equity portion of Paramount’s proposed $78 billion takeover. That’s not subtle. This is Paramount attempting to vaporize WBD’s repeated claims that the deal’s financing is shaky.
And make no mistake, this is a serious guarantee. If the transaction somehow implodes, Ellison would be on the hook for roughly a sixth of his estimated $250 billion net worth. Paramount is also cracking open the books on the Ellison family trust, letting shareholders see exactly what’s there — another very deliberate response to WBD’s skepticism.
Before this latest offer occurred, Warner Bros. Discovery’s board hadn’t been impressed. They’ve rejected Paramount’s bid multiple times, instead backing a rival proposal from Netflix that they say delivers superior value. In plainer terms, the board has accused Paramount of misleading shareholders and leaning on what it previously called “illusory” financing.
Paramount’s counteroffensive is clearly aimed at that critique. Alongside Ellison’s personal backstop, the company confirmed that the family trust — which Ellison has now agreed not to revoke — holds 1.16 billion Oracle shares. That detail directly addresses questions the WBD board raised about whether the trust could actually support a deal of this size.
Paramount also matched Netflix where it hurts: the breakup fee. It’s now offering $5.8 billion if the deal collapses, up from $5 billion, bringing it in line with Netflix’s own penalty should its agreement with WBD fall apart.
What hasn’t changed is the valuation. Paramount is still offering $30 per WBD share, a price that includes CNN and the company’s full slate of cable assets. And while Netflix’s bid comes in lower at $27.75 per share, the argument from Netflix and WBD is that spinning off those cable networks will ultimately unlock more value.
Now, this is far from over. I fully expect WBD to reject this offer as well — and I also expect Ellison to come back with a higher per-share number. If that happens, Netflix’s supposedly “done” deal suddenly starts looking a lot less secure, at least in my estimation.
The WBD board has about ten business days to formally respond. That said, if history is any guide, we won’t be waiting that long. Like the last time around, I’d expect leaks to start surfacing well before any official announcement if the board is even remotely entertaining Paramount’s proposal.
Paramount’s biggest unresolved issue remains the same. WBD has been openly uneasy about how much of the financing relies on capital from Gulf royal families in Saudi Arabia, Qatar, and Abu Dhabi. The board has repeatedly questioned why Larry Ellison — one of the richest people on Earth — needs that level of outside support to close the deal.
At this point, it’s a staring contest. And Paramount is betting that putting Larry Ellison’s fortune front and center will finally make WBD blink.