In a dramatic escalation of the high-stakes media merger battle, Oracle co-founder Larry Ellison has taken a monumental personal step to back his son's ambitious acquisition plan. The billionaire has personally guaranteed over $40 billion in financing for Paramount Skydance's $78 billion hostile bid for Warner Bros Discovery (WBD). This move directly addresses the open scepticism from WBD's board regarding the certainty of funding for the offer.
Silencing the Doubts: A Father's Financial Backing
The board of Warner Bros Discovery had repeatedly expressed concerns, arguing that Paramount's initial offer leaned too heavily on external investors and lacked reliable financial closure. In takeover scenarios, boards are legally bound to evaluate not just the offered price but the actual probability of the deal being completed. WBD had labelled the original funding structure as unreliable, using this as a basis to favour a competing proposal with more transparent backing.
Larry Ellison's unprecedented guarantee covers a staggering $40.4 billion of the equity financing. This acts as a solid backstop, ensuring the transaction can proceed even if other investors withdraw. To further bolster confidence, Paramount has agreed to provide greater transparency concerning the Ellison family trust and has confirmed the Oracle shareholdings that form the foundation of this financing. Collectively, these actions are designed to completely neutralise WBD's claims about the bid's financial uncertainty.
Paramount's Hostile Bid vs. The Netflix Agreement
Paramount Skydance, led by David Ellison, is offering $30 per share to acquire the entirety of Warner Bros Discovery, which includes cable assets like CNN. This stands in contrast to an existing $83 billion agreement between WBD and streaming giant Netflix. The Netflix deal proposes a lower per-share price of approximately $27.75 but excludes WBD's cable networks, which would be spun off into a separate entity. WBD maintains that once these assets are separated, the Netflix agreement delivers superior overall value to its shareholders.
Because Paramount's approach is a hostile bid, it circumvents WBD's management entirely, appealing directly to the company's shareholders. To increase pressure, Paramount has also raised its break-up fee to $5.8 billion, matching the penalty Netflix would incur if its own deal with WBD falls apart. These strategic revisions aim to make it significantly harder for WBD's board to dismiss the bid solely on financing grounds.
The High-Stakes Family Dynamic and What Comes Next
While family guarantees are not uncommon in private business dealings, they are exceptionally rare at this colossal scale. Larry Ellison, ranking among the wealthiest individuals globally, is effectively endorsing his son's strategic vision by pledging his personal fortune. This bold move underscores Paramount Skydance's determination to force serious engagement from both WBD's board and its shareholders.
The WBD board is now expected to issue a formal response to this revised and heavily fortified offer. Even if the directors remain opposed, the strengthened financing structure could empower shareholders to challenge the board's recommendation. Financial markets have reacted positively to this escalation, with WBD's share price rising as investors consider the heightened likelihood of a full-blown bidding war.
The central question remains: Is a father's personal guarantee, even one worth over $40 billion, sufficient to overcome entrenched board resistance? What is unequivocally clear is that Paramount Skydance has now pushed all its chips to the centre of the table. This takeover battle has transformed into a critical test of funding certainty, shareholder confidence, and the formidable power of a family's commitment.
