Paramount says Larry Ellison now personally guarantees $40 billion of the Warner Bros. bid

By Tomi Kilgore

The buyout offer for Warner Bros. was improved, not by raising the per-share bid but by addressing concerns about financing

Larry Ellison now provides a "personal guarantee" of $40 billion of the financing for Paramount's $108 billion offer to buy Warner Bros. Discovery.

Paramount Skydance won't take no for an answer, as it improved its offer Monday to buy Warner Bros. Discovery, not by raising the price per share it will pay, but by addressing concerns over financing.

When Warner Bros. (WBD) rejected Paramount's (PSKY) $108 billion offer last week - which included a per-share valuation of $30 - the company raised concerns that an "unknown and opaque revocable trust" had backed the equity commitment of $40.7 billion. The company had basically questioned, Why didn't the Ellison family, with its "ample resources," back the deal?

Also read: Paramount's hostile bid for Warner Bros. shaken as Trump's son-in-law drops out.

Paramount said Monday that it would still pay $30 a share for Warner Bros., but now the equity commitment comes with an "irrevocable personal guarantee" from Larry Ellison, who is the father of Paramount Chief Executive David Ellison and the fifth-richest person in the world, according to the Bloomberg Billionaires Index.

David Ellison said he believes Paramount's "fully financed all-cash offer" continues to be superior to Netflix's (NFLX) bid, and that he expects Warner Bros.'s board to take the necessary steps to secure this deal.

Warner Bros.' stock (WBD) rose 3.5% on Monday, and Paramount shares climbed 4.3%, among the S&P 500 index's SPX top gainers.

Shares of Netflix, which has an agreement to buy Warner Bros. in a cash and stock deal that values Warner Bros. shares at $27.75 each, fell 1.2%.

To address Warner Bros.' need for flexibility in interim operations, Paramount said its amended proposal offers further flexibility regarding debt refinancing transactions.

Paramount has also raised its termination fee to $5.8 billion from $5 billion.

Raymond James analysts, led by Ric Prentiss, had written in a note last week after Paramount's offer was rejected that they believed the per-share part of the deal would be raised to $32. But they also said Paramount could wait to raise the per-share part of the offer until the tender period expires on Jan. 8.

Meanwhile, Netflix also made a disclosure on Monday regarding financing for its deal.

The streaming giant said it entered into a senior unsecured revolving credit agreement that provides up to $5 billion in financing for the Warner Bros. merger deal. The company also entered into a delayed draw credit agreement that provides up to $20 billion in term loans.

-Tomi Kilgore

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12-22-25 1817ET