In a dramatic escalation of the battle for control of Warner Bros Discovery, tech titan Larry Ellison has stepped in with a colossal personal financial guarantee exceeding $40 billion. This move aims to bolster Paramount Skydance's hostile $108.4 billion takeover attempt, directly challenging a rival agreement WBD struck with Netflix.
A Hostile Bid and a Rival Netflix Deal
The corporate clash intensified last week when the board of Warner Bros Discovery urged its shareholders to reject the unsolicited offer from Paramount, which is controlled by the Ellison family. This plea came shortly after WBD itself agreed to a significant $82.7 billion deal to sell its famed movie studios, the HBO cable network, and the HBO Max streaming service to Netflix earlier this month.
WBD's directors had labelled the Paramount bid as "inadequate" and fraught with "significant" risks and costs. Furthermore, they accused Paramount of misleading investors about the strength of its financial backing, specifically questioning claims of a "full backstop" from the Ellisons.
Ellison's $40.4bn Personal Backstop
In a direct response to these criticisms, Paramount announced on the morning of Monday, 21st January 2025, that Larry Ellison, the billionaire co-founder of software giant Oracle, has personally agreed to backstop $40.4 billion in equity financing for the proposed acquisition. The statement from Paramount argued it was addressing WBD's "amorphous need for financial flexibility" and firmly rejected the notion that the Netflix offer was superior.
The fundamental difference between the two proposals lies in their scope. While Netflix has agreed to purchase only select assets, Paramount's bid is for the entirety of Warner Bros Discovery. This would include iconic brands such as CNN, Cartoon Network, and the Discovery channel, which are not part of the Netflix transaction.
Paramount's Commitment and the Stakes for Hollywood
David Ellison, Chairman and CEO of Paramount and son of Larry, reiterated the company's determination. "Paramount has repeatedly demonstrated its commitment to acquiring WBD," he stated. "Our $30 per share, fully financed all-cash offer was on December 4th, and continues to be, the superior option to maximise value for WBD shareholders."
He positioned the potential acquisition as a catalyst for growth, promising greater content production, increased theatrical output, and more consumer choice. Ellison called on the WBD board to "preserve and strengthen an iconic Hollywood treasure for the future."
This extraordinary guarantee from one of the world's wealthiest individuals throws the future of Warner Bros Discovery into further uncertainty, setting the stage for a protracted and high-stakes showdown that could reshape the global media landscape.
