:max_bytes(150000):strip_icc()/GettyImages-2250507119-22c8be85f4e548a2bb46df4add6199f7.jpg "Paramount Tweaks its Deal in Bid to Wrestle Warner Bros. Away From Netflix.")
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Key Takeaways
- The latest tweaks to Paramount Skydance’s offer for Warner Bros. Discovery address some of the concerns outlined by Warner Bros. last week.
- Stocks of all three companies involved in the battle for Hollywood dominance—the other being Netflix—moved Monday on the latest developments.
Paramount wants Warner Bros. Warner Bros. wants Netflix. A tech billionaire hopes his personal guarantee can tip the scales in the other direction.
Paramount Skydance (PSKY) on Monday tweaked its offer for Warner Bros. Discovery (WBD), addressing some of the concerns the latter company outlined in a letter to shareholders last week. Warner Bros. rebuffed Paramount CEO David Ellison’s attempt to pry the HBO owner away from Netflix (NFLX), which has already agreed to acquire it for upwards of $80 billion.
The latest development is that Paramount says Larry Ellison, co-founder of Oracle and the world’s fifth-richest person, agreed among other things to personally guarantee more than $40 billion of the equity financing for its offer, as well as to not amend a family trust or transfer assets that might otherwise endanger the transaction.
Why This Matters to Investors
Each development in what looks likely to result in a drawn-out battle for Hollywood dominance is moving shares of the involved parties. Investors are trying to determine whether Netflix’s deal to acquire Warner Bros. Discovery will go through or if Paramount Skydance can pull off its own acquisition attempt.
Warner Bros. did not respond to Investopedia’s request for comment in time for publication. Still, the development appears to have struck a chord with some investors: Shares of Paramount are up more than 5% following the announcement, and Warner Bros.’ are up roughly 3%. Meanwhile, Netflix (NFLX) is down about 1%.
Gerry Cardinale, CIO of Paramount stakeholder RedBird Capital Partners, which is providing some of the financing for the proposed deal, on Monday told CNBC that “We’ve come in and said that ‘okay, we will give you—Larry will give—a personal guarantee on the equity financing for this transaction.”
Paramount investors may be cheering the latest news, but they may also be applauding the general possibility that they could get more money—which, for now, isn’t being offered. Paramount has so far maintained its $30 cash-per-share deal. Warner Bros. last week called Paramount’s offer “illusory” and said there was “no Ellison family commitment of any kind.”
Netflix, meanwhile, in a regulatory filing Monday said it secured $25 billion in financing to support the planned deal.
