Paramount Takes $30-Per-Share Cash Offer for Warner Bros Discovery Directly to Shareholders

Paramount has sent a new letter taking its $30 per share all-cash offer for Warner Bros. Discovery directly to shareholders, slamming Netflix’s deal and calling his financing for the $108.4 billion bid “air-tight.”

“Paramount began pursuing Warner Bros. Discovery (“WBD”) because we, along with our partner RedBird Capital, believe we are the best stewards not only to build long-term value for the asset but also delight audiences and help cultivate a more vibrant creative community,” the letter states. “We funded, founded and then merged Skydance with Paramount and know the sacrifices and investment it takes to capitalize and grow a media business. I am passionate and dedicated to this pursuit, committed to putting my own money in, and that is why I am writing to you today.”

The offer includes over $41 billion of equity and $54 billion in committed debt financing that is fully backstopped by the Ellison family, whose family trust has over $250 billion in Oracle stock and other assets, and RedBird Capital Partners. Approximately $17 billion is reserved to allow Warner Bros. Discovery to extend its existing bridge loan. Partners in the bid include Bank of America, Citibank, Apollo Global Management, Jared Kushner’s Affinity Partners and Middle Eastern sovereign wealth funds.

“The equity commitment papers submitted to WBD were identical in all material respects to commitments that the advisors to WBD had agreed to in other large transactions such as Twitter and Electronic Arts,” the letter continues. “To suggest that we are not “good for the money” (or might commit fraud to try to escape our obligations), as certain reports have speculated, is absurd.  That absurdity is underscored by the fact that WBD and its advisors never picked up the phone or typed out a responsive text or email to raise any question or concern or to seek any clarification about either the trust or our equity commitment papers.”

Paramount added that the debt commitments are not condition upon its financial condition nor is there any “material adverse change” condition tied to the bid.

Paramount’s tender offer will be open for 20 business days, or until Jan. 8, and Warner Bros Discovery’s board will need to respond with a recommendation within 10 business days, or by Dec. 22. Under the terms, shareholders have withdrawal rights that expire at 5 p.m. ET on Jan. 8. Those rights would be extended if Paramount extends the tender offer.

More to come…

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