Oracle Founder Pledges US$40 Billion to Back Paramount’s WBD Bid

Larry Ellison, Co-Founder, Oracle, has committed a US$40.4 billion personal guarantee to support the Paramount Skydance hostile takeover bid for Warner Bros Discovery (WBD), aiming to resolve financing concerns raised by the board of directors.

The intervention by Ellison follows a formal rejection by the board of directors of WBD, which characterized the previous proposal as "illusory" due to a lack of verifiable capital. According to Reuters, the board questioned the validity of equity commitments relying on a revocable trust.

"Paramount has repeatedly demonstrated its commitment to acquiring WBD," says David Ellison, Chairman and CEO, Paramount Skydance. "Our US$30 per share, fully financed all-cash offer was on Dec. 4, and continues to be, the superior option to maximize value for WBD shareholders”.

The conflict over the control of WBD originated after the corporation reached a definitive agreement to sell its film and television studios, HBO, and HBO Max to Netflix for US$82.7 billion. Under the Netflix agreement, WBD would spin off its linear networks into a separate entity called Discovery Global.

In contrast, the Paramount Skydance offer of US$108.4 billion seeks to acquire the entire corporation, including assets such as CNN, Cartoon Network, and the Discovery channel. The WBD board of directors has expressed a preference for the Netflix transaction, citing the financial strength of the streaming corporation, which maintains a market capitalization of about US$412 billion.

Before the personal guarantee from Ellison, WBD argued that the financial backstop of Paramount Skydance was insufficient. The board noted that the Ellison family had previously chosen not to backstop the offer despite repeated requests for unconditional financing commitments.

Complementary Details and Operational Risks

Despite Ellison’s equity financing commitment, significant differences regarding execution and synergies remain between the parties. The WBD board of directors indicates that the Paramount Skydance proposal includes restrictive operating conditions, such as limits on new content licensing agreements before the closing of the deal.

Furthermore, the board describes the plan to generate US$9 billion in synergies as aggressive. Such a target would likely result in extensive job cuts that could strain the entertainment industry. The technical comparison of the offers provides two distinct financial paths for stockholders:

• Paramount Skydance Offer: US$30 per share in cash.

• Netflix Agreement: US$27.75 per share, consisting of US$23.25 in cash and US$4.50 in Netflix stock.

Paramount Skydance argues its offer provides greater regulatory certainty and immediate liquidity. However, Netflix is already engaged in the regulatory review process with the US Department of Justice and the European Commission.

Market data reflected these tensions following the announcement. Shares of WBD fell 1.4% to US$28.50 in premarket trading, while Paramount shares declined 1.8%. WBD has not set a specific date for a shareholder vote, though Samuel Piazza, Chairman, WBD, says it is expected between March and July 2026.