Oracle co-founder Larry Ellison will provide a personal guarantee of $40.4 billion in equity financing to back Paramount Skydance's all-cash $108.4 billion bid for Warner Bros Discovery, a regulatory filing showed on Monday.
The guarantee aims to address Warner Bros board's doubts over Paramount's financing and the lack of full backing from the Ellison family, which had led to the company preferring a cash-and-stock deal with Netflix.
Paramount launched a hostile takeover bid backed by three Gulf sovereign wealth funds last week and asked Warner Bros' shareholders to reject a rival Netflix bid favoured by the board.
Paramount said the amended terms do not change the $30-per-share offer. Warner Bros shares rose nearly 4 per cent in premarket trading, while Paramount Skydance added about 3 per cent.
“In an effort to address Warner Bros’ amorphous need for ‘flexibility’ in interim operations, Paramount’s revised proposed merger agreement offers further improved flexibility to Warner Bros on debt refinancing transactions, representations and interim operating covenants,” Paramount said.
Paramount also offered to increase its regulatory reverse termination fee from $5 billion to $5.8 billion.
Warner Bros and Netflix did not immediately respond to requests for comment.
The bidding war for Hollywood's most prized assets shows no sign of ending soon, as the winner will gain a big advantage in the streaming wars by locking up a deep content library that has long been the target of blockbuster deals.
“Paramount remains in a precarious position and is making a last-ditch effort to avoid being left out in the shadows,” said Paolo Pescatore, analyst at PP Foresight. “The improved offer is a step in the right direction but it is unlikely to be enough.”
As part of the revised terms, Mr Ellison also agreed not to revoke the family trust or transfer its assets during the pendency of the transaction, the filing showed.
Paramount said it has raised its regulatory reverse termination fee to $5.8 billion from $5 billion to match the competing transaction and extended the expiration date of its tender offer to January 21.
US President Donald Trump has said he would be involved in the process of approving the deal. He added that a takeover by Netflix “could be a problem” due to concerns about the size and market power of the combined entity.
