In a bold move to strengthen its takeover attempt, Paramount and the Ellison family announced on Monday that the company was expanding its bid for Warner Bros. Discovery.
Paramount’s Revised Offer
The updated proposal aims to address concerns that Warner’s board had about Paramount’s original $108 billion proposal. Paramount maintains that it will still pay shareholders $30 per share in cash. The company also agreed to raise the termination fee from $5 billion to $5.8 billion, matching the amount Netflix agreed to pay if the deal were cancelled – one of the largest break-up fees ever offered in a merger.
Larry Ellison’s Personal Guarantee
A key feature of the new bid is an irrevocable personal guarantee from Oracle chairman and billionaire Larry Ellison. In a news release, Paramount said: “Larry Ellison has agreed to provide an irrevocable personal guarantee of $40.4 billion of the equity financing for the offer and any damages claims against Paramount.” The release added that “Mr. Ellison has agreed not to revoke the Ellison family trust (which has been operating for nearly 40 years as a counterparty to numerous transactions) or adversely transfer its assets during the pendency of the transaction.”
Ellison’s personal fortune is currently worth more than $240 billion, according to Bloomberg Billionaires, much of it in Oracle stock.
Netflix Deal and Hostile Bid
Warner is already moving ahead with a deal to sell its television, movie and streaming assets to Netflix, making Paramount’s offer a hostile one. Netflix is seeking only to acquire Warner’s film studio, streaming service and HBO network, while Paramount wants the entire company.
Spokespeople for Netflix and Warner Bros. did not immediately reply to requests for comment Monday.
Warner’s Concerns About the Ellison Family
On Wednesday, Warner Bros. Discovery chairman Samuel Di Piazza told CNBC that the board’s concerns centered around the Ellison family’s backing. “Nowhere in any of these proposals did Larry Ellison guarantee,” Di Piazza said. “Obviously, the ability to deal directly with Larry if there was an issue to close would be critical.”
Earlier that day, WBD’s board recommended that shareholders reject the Paramount hostile bid and reaffirmed its commitment to the earlier deal with Netflix.
Regulatory Angle and Trump Administration
The media company controlled by the Ellisons has claimed it could obtain regulatory approval from the Trump administration more easily than Netflix could. Earlier this year, the Ellisons acquired Paramount Global with approval from the Trump administration. That approval followed CBS News agreeing to pay $16 million to President Donald Trump’s future presidential library over an interview that “60 Minutes” had conducted with then-presidential candidate and vice president Kamala Harris.
Trump claimed the interview was misleading. The settlement did “not include a statement of apology or regret,” CBS said at the time.
CBS and 60 Minutes Drama
After the Paramount acquisition, CEO David Ellison installed longtime commentary writer Bari Weiss as editor-in-chief of CBS News and bought Weiss’ online news site, The Free Press. Tensions flared at CBS again this past weekend over a “60 Minutes” story. Weiss announced on Friday that the network would air a story titled “Inside CECOT” and promoted it on social media. She then pulled the piece from Sunday’s broadcast, and CBS announced the decision just hours before it was set to run.
Sharyn Alfonsi, the correspondent who reported the story, told her CBS colleagues in an email that the decision was “political” and not editorial, according to a copy of her email obtained by The New York Times and multiple other outlets. “Our story was screened five times and cleared by both CBS attorneys and Standards and Practices,” Alfonsi wrote. “It is factually correct. In my view, pulling it now, after every rigorous internal check has been met, is not an editorial decision, it is a political one.”
Trump’s Comments on Media Ownership
A Warner Bros. Discovery takeover would give the Ellisons and Paramount control of CNN, the global news network that is a fixture of Trump’s rants against the media. Trump has said he will take a direct role in approving any Warner Bros. Discovery deal. He recently told reporters that he thinks it is “imperative that CNN be sold.” “I don’t think the people that are running that company right now…should be allowed to continue,” Trump said at a White House event on Dec. 10.
Trump has also repeatedly criticized individual CNN reporters. However, in recent days he has complained about the Ellisons. “For those people that think I am close with the new owners of CBS, please understand that 60 Minutes has treated me far worse since the so-called ‘takeover,’ than they have ever treated me before,” Trump posted on Truth Social Dec. 16. “If they are friends, I’d hate to see my enemies!” he added.
Key Takeaways
- Paramount’s new bid includes a $40.4 billion personal guarantee from Larry Ellison.
- The termination fee has risen to $5.8 billion, matching Netflix’s offer.
- Warner’s board cites concerns about the Ellison family’s involvement.
The saga underscores the complex interplay of corporate strategy, regulatory approval, and media ownership that will shape the future of one of the industry’s largest entertainment conglomerates.
