Warner Bros. Discovery publicly criticized Larry and David Ellison, accusing them of consistently misleading shareholders in their attempt to take over the company through Paramount.
Paramount, controlled by the Ellison family, claimed its bid was secured by a “full backstop,” but Warner Bros. Discovery refuted this, saying it never existed.
Driving the news: Warner Bros. Discovery recently agreed to sell much of its business to Netflix in a cash-and-stock deal valued at $83 billion, turning down Paramount’s all-cash $108 billion bid.
- Paramount has submitted six offers over 12 weeks and recently launched a hostile takeover, taking its case directly to Warner Bros. Discovery shareholders.
The big picture: Warner Bros. Discovery maintains its sale process to Netflix was “full, transparent and competitive,” highlighting extensive meetings with Paramount and the Ellisons.
- The company raised concerns over Paramount’s financing, noting the bid is backed by a revocable trust controlled by Larry Ellison, offering less security than a personal guarantee.
- Warner Bros. Discovery cited repeated requests to Paramount for an “unconditional financing commitment” and expressed worries about limited recourse if Paramount’s deal collapses.
- Paramount insists the Ellison family’s trust holds over $250 billion in assets and argues suggestions it can’t fund the acquisition are “absurd.”
- Paramount also claims it has secured $54 billion in debt financing from major financial institutions.
What we’re watching: The Netflix deal, if completed, would make Netflix a dominant force in entertainment and gaming, taking over the HBO Max service and Warner Bros. studios.
- Final approval for any deal hinges on regulatory clearance, with President Donald Trump indicating he intends to be involved in the decision.
- Warner Bros. Discovery’s agreement with Netflix prohibits it from seeking other offers, but Paramount could raise its bid or encourage shareholders to reject the Netflix deal.
- If Warner Bros. Discovery chooses a different bidder, it must pay Netflix a $2.8 billion break fee; Netflix can also increase its offer to counter Paramount.
