Ellison backed Paramount offer still falls short for Warner Bros Discovery

Paramount Skydance delivered a revised takeover bid on December 22 and 23, adding what it described as material financing reassurances, yet Warner Bros Discovery has not changed its recommendation for the competing Netflix deal. The amended proposal keeps the purchase price at $30 per share and reiterates an aggregate offer previously described as roughly $108.4 billion for the whole company, while introducing an irrevocable personal guarantee from Oracle co founder Larry Ellison covering $40.4 billion of the equity financing and potential damages claims.

Paramount also said Ellison agreed not to revoke a family trust or transfer its assets during the transaction review period, a covenant that RedBird partner Gerry Cardinale said takes the trust concern "off the table." The bidder raised its regulatory reverse termination fee to $5.8 billion from $5.0 billion, extended the tender offer to January 21, 2026, and gave Warner Bros Discovery greater interim flexibility on debt refinancing and operating covenants in an amended merger agreement.

Warner Bros Discovery confirmed receipt of the amended tender offer and said, consistent with its fiduciary duties, the board will carefully review the proposal with independent financial and legal advisors. The board has not modified its prior recommendation linked to the Netflix transaction and urged shareholders to reject Paramount's earlier approach, citing doubts about financing and the absence of a full guarantee from the Ellison family.

Markets moved on the news, with Warner Bros Discovery shares closing about 3.5 percent higher and Paramount shares rising a bit more than 4 percent. The stock reaction reflects investor appetite for deal uncertainty that could unlock value, but it also highlights lingering concerns about whether Paramount's package is sufficiently persuasive to win a shareholder vote or to pass antitrust and other regulatory hurdles.

Investor reactions were mixed. Some large shareholders signaled openness to reconsidering Paramount if terms were materially improved. Alex Fitch, a portfolio manager associated with Harris Associates, said he would be open to a revised Paramount offer that contained "superior financial consideration." Media accounts alternately identified the commenting shareholder as Harris Oakmark or Harris Associates, producing confusion about the precise source of the remark. Mario Gabelli, chief executive of GAMCO Investors and a noted WBD shareholder, urged Netflix to "simplify [the] structure" of its bid by increasing the cash component. Third Bridge analyst John Conca warned that it is "likely we see Paramount up its offer if it cannot convince more than 50 percent of shareholders with its current bid," and he speculated Netflix might respond competitively.

The next steps are clear and conventional. Warner Bros Discovery will complete its review with advisors, shareholders have until January 21 to decide on Paramount's tender, and observers will watch for a higher Paramount bid or any simplification from Netflix intended to lock shareholder support. The presence of a large personal guarantee from Ellison addresses a major financing objection, but it does not eliminate regulatory risk or guarantee shareholder acceptance, leaving the outcome of what could become a protracted contest uncertain.