Warner Bros. Discovery Shareholder Harris Associates ‘Very Open’ to Revised Paramount Bid

Warner Bros. Discovery shareholder Harris Associates is calling on Paramount to revise its $108.4 billion bid for the media giant.

In an interview with Reuters, portfolio manager Alex Fitch said that Netflix’s $82.7 billion deal for WBD’s studio and streaming assets is “superior on deal terms” but “comparable on value” with Paramount’s offer for the entire company.

“The good news is that the concerns on deal terms seem entirely addressable,” Fitch added. “If Paramount decides to come forward with superior financial consideration and properly addresses the issues with deal terms, we would be very open to a revised Paramount offer. The ball is in their court.”

Harris Associates holds a 3.9% stake in Warner Bros. Discovery, making it the media giant’s fifth largest shareholder. A spokesperson for the firm did not immediately return TheWrap’s request for comment.

Fitch’s comments come after GAMCO Investors chairman Mario Gabelli previously told TheWrap that he’s “highly likely” to tender his clients’ WBD shares to Paramount. However, Gabelli acknowledged that the company is still in the “early innings” with Netflix, signaling his support for higher bids from the two companies.

David Ellison has been holding firm on his latest all-cash $30 per share bid, which has been taken directly to shareholders. However, the executive previously said that the offer was not his “best and final.”

Paramount’s bid includes a total of $40.7 billion in equity financing, including $11.8 billion from the Ellison family and $24 billion from Saudi Arabia’s Public Investment Fund, the Qatar Investment Authority and Abu Dhabi’s L’imad Holding Company,  according to a filing with the U.S. Securities and Exchange Commission. Jared Kushner’s Affinity Partners had also contributed $200 million prior to backing out, according to the New York Times.

The Ellisons and Gerry Cardinale’s RedBird Capital Partners agreed to fully backstop 100% of the equity financing through the Ellison family trust, which contains over $250 billion of assets including 1.16 billion Oracle shares. The bid also includes $54 billion in committed debt financing from Bank of America, Citibank and Apollo Global Management. Roughly $17 billion has been reserved to allow WBD to extend an existing bridge loan. 

Despite their assurances, Warner Bros. Discovery’s board has said that the offer is “inadequate” and “illusory.”

Paramount’s tender will be open for a minimum of 20 business days, or until Jan. 8, with the option for an extension. Under the terms, shareholders have withdrawal rights that expire at 5 p.m. ET on Jan. 8 unless the offer is extended.

More to come…

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