Ellison backs Paramount bid for WBD with $40 billion personal guarantee

Investing.com -- Oracle Corporation (NYSE: ORCL). co-founder Larry Ellison has stepped in to personally guarantee $40.4 billion in equity financing for Paramount Skydance’s (NASDAQ: PSKY) hostile pursuit of Warner Bros Discovery Inc (NASDAQ: WBD), a move designed to dismantle the primary defense used by the Warner board to favor a rival deal with Netflix Inc (NASDAQ: NFLX)

The amendment, disclosed in a regulatory filing on Monday, directly addresses claims made by the Warner Bros. Discovery (WBD) board last week that Paramount’s financing was "illusory." By providing an irrevocable personal guarantee, the elder Ellison, the world’s fifth-richest person, is putting his $246 billion fortune behind the bid led by his son, Paramount CEO David Ellison.

The battle for WBD has devolved into a high-stakes standoff between legacy Hollywood and the streaming vanguard. Paramount is sticking to its $30-per-share all-cash offer, which values WBD at approximately $108.4 billion including debt. This stands in contrast to the $82.7 billion cash-and-stock deal WBD recently struck with Netflix, which would see the company’s studio and streaming assets carved out while spinning off its cable networks.

Key Terms of the Amended Paramount Offer:

• Irrevocable Guarantee: Larry Ellison will personally back $40.4 billion in equity and any potential damage claims.




• Trust Lock-up: Ellison pledged not to revoke or transfer assets out of the Ellison Family Trust during the transaction.




• Higher Breakup Fee: Paramount increased its regulatory reverse termination fee to $5.8 billion, matching the fee in the Netflix agreement.




• Operational Flexibility: The revised merger agreement offers WBD more leeway on debt refinancing and interim operations.

The WBD board previously urged shareholders to reject Paramount’s offer, citing the "opaque" nature of the Ellison family trust. In a Schedule 14D-9 filing on December 17, WBD advisors argued that without a personal guarantee, the funding remained a significant risk.

Paramount hit back on Monday, claiming these concerns were never raised during 12 weeks of prior negotiations. "Paramount has repeatedly demonstrated its commitment to acquiring WBD," David Ellison said in a statement, calling the $30-per-share offer "the superior option to maximize value."

Investors appeared to view the personal guarantee as a credible threat to the Netflix deal. Shares of Warner Bros. Discovery climbed 3.4% in Monday afternoon trading, creeping closer to Paramount’s $30 offer price. Paramount (PSKY) shares surged 4.2%, while Netflix slipped 1.5%.

The hostile nature of the bid means Paramount is appealing directly to WBD shareholders, bypassing a board that has so far remained loyal to the Netflix path. Paramount has extended its tender offer deadline to January 21, 2026.

If successful, the merger would create a media titan combining the Warner Bros. and Paramount studios, potentially rivaling Walt Disney Co. in scale. However, any deal of this magnitude faces a steep climb through regulatory antitrust reviews, a process that could stretch well into 2026.

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