Larry Ellison pledges $40.4 bn personal guarantee for Paramount bid on WBD

New Delhi: Paramount Skydance Corp. has secured an irrevocable personal guarantee from Oracle Corp. co-founder Larry Ellison for $40.4 billion in equity financing, aimed at addressing concerns raised by Warner Bros. Discovery Inc.'s board. 

This pledge comes as competition heats up for control of the media giant, with Paramount's offer remaining at $30 per share but now backed by one of the tech world's wealthiest individuals.

The guarantee, disclosed in a filing late Monday, is intended to alleviate doubts about the financial viability of Paramount's $108.4 billion bid for Warner Bros. Discovery, which includes assuming the target's debt. 

Larry Ellison, whose net worth exceeds $200 billion, largely from his stake in Oracle, is providing the backing to support his son, David Ellison, who leads Skydance Media. Skydance recently merged with Paramount Global in a deal that positioned the combined entity to pursue larger acquisitions in the consolidating entertainment industry.

Warner Bros. Discovery, home to iconic franchises like Harry Potter, DC Comics, and HBO's hit series, has been a prime target amid industry pressures from streaming wars and declining traditional TV revenues. 

The company's board had previously expressed reservations about Paramount's initial proposal, citing uncertainties in funding and strategic fit. Ellison's involvement escalates the stakes, signaling confidence in the merger's potential to create a powerhouse capable of competing with Netflix Inc. and Walt Disney Co.

This isn't the first time the Ellison family has dipped into media deals. David Ellison's Skydance has produced blockbusters like "Top Gun: Maverick" and "Mission: Impossible" films, often in partnership with Paramount. Larry Ellison's guarantee mirrors his history of high-stakes investments, including his ownership of the Hawaiian island of Lanai and support for various tech ventures.

Rival suitors have also moved to bolster their positions. On the same day, another bidder, widely speculated to be a consortium involving tech and media players, enhanced its financing without raising the per-share offer, though details remain sparse. Analysts suggest this could spark a bidding war, potentially driving up Warner Bros. Discovery's stock, which closed up 5% on Tuesday amid the news.