The battle for control of Warner Bros Discovery (WBD) has escalated dramatically after tech billionaire Larry Ellison made a colossal personal financial commitment to support a rival bid against streaming giant Netflix.
Ellison's $40.4bn Personal Backstop
In a stunning move designed to overcome financing doubts, Larry Ellison has personally guaranteed $40.4 billion (£30bn) to bolster Paramount Skydance's ambitious $108.4 billion all-cash offer for the entertainment conglomerate. This intervention directly challenges a pre-existing agreement by the WBD board to sell key assets, including its movie studios and HBO, to Netflix for $82.7 billion.
The board had previously urged shareholders to reject the Paramount approach, citing concerns over funding and the lack of a full guarantee from the Ellison family. This latest manoeuvre, confirmed on Monday, is a direct response to those criticisms. To further solidify the offer's credibility, Ellison—a noted confidant of former President Donald Trump—has agreed not to revoke or transfer assets from the family trust while the potential transaction is pending.
Paramount Ramps Up Pressure on WBD Shareholders
Paramount, which is controlled by the Ellison family, is pursuing a full takeover of WBD. This would grant it control not just of the film and streaming assets coveted by Netflix, but also of cable networks like CNN, Cartoon Network, and the Discovery Channel.
David Ellison, Paramount's chief executive and Larry's son, defended the sweetened bid. "Our $30 per share, fully financed all-cash offer continues to be the superior option to maximise value for WBD shareholders," he stated, arguing the acquisition would act as "a catalyst for greater content production, theatrical output, and consumer choice."
In addition to the personal guarantee, Paramount has increased its reverse termination fee to $5.8 billion from $5 billion and extended the deadline for its tender offer to 21 January.
Regulatory Hurdles and Market Reaction
Analysts remain cautious about whether the improved terms will be sufficient. "The improved offer is a step in the right direction, but it is unlikely to be enough," commented Paolo Pescatore of PP Foresight. However, some significant WBD investors, including Harris Associates, have signalled they might reconsider a revised Paramount bid if funding concerns are resolved.
Both proposed deals face significant regulatory scrutiny on both sides of the Atlantic. A merger between Paramount and WBD would create a new US media titan to rival Disney, while a Netflix-WBD tie-up would further consolidate the dominance of a streaming leader that already boasts 428 million subscribers, raising substantial antitrust questions.
The market reacted positively to Ellison's backing, with WBD shares rising nearly four per cent on Monday afternoon. Paramount's stock also gained about three per cent. Both Netflix and Warner Bros Discovery declined to comment on the latest developments in this high-stakes corporate saga.
