Paramount $PARA Skydance said Monday that billionaire Larry Ellison is personally backing its hostile offer to buy Warner Bros. Discovery to the tune of more than $40 billion, escalating its bidding war with Netflix $NFLX.
Larry Ellison, the co-founder of Oracle $ORCL and one of the richest people in the world, is the father of Paramount chief David Ellison. Paramount has been seeking to buy all of Warner Bros. Discovery, taking a hostile offer directly to Warner Bros. shareholders after the board rejected Paramount's offer in favor of a bid by Netflix to buy just its studio and streaming businesses. That offer would see Warner Bros. spin out its TV assets, including CNN and TNT, into a separate company. After Paramount argued to shareholders that its offer to buy the full company is a better deal, Warner Bros. Discovery's board advised shareholders to reject it, raising questions about its financing — and whether the billionaire Ellisons could guarantee the money they were offering.
The revised offer from Paramount on Monday was meant to answer those questions.
"Larry Ellison has agreed to provide an irrevocable personal guarantee of $40.4 billion of the equity financing for the offer and any damages claims against Paramount," Paramount said on Monday.
"Paramount urges WBD shareholders to register their preference for Paramount's superior offer with the WBD Board by tendering their shares today," Paramount said.
Paramount launched the hostile bid for Warner Bros. Discovery earlier this month following the media giant's decision to accept Netflix's acquisition offer. Paramount's all-cash, $30-per-share offer exceeds the $27.75 Netflix has agreed to pay, but the same price Paramount offered Warner in its formal bid.
The biding war has also attracted the attention of President Donald Trump, who is reportedly eager to see changes at CNN, a cable news network he is known to loathe. The Ellisons have cultivated a close relationship with the president.
Trump said earlier this month that Netflix has “a very big market share, and when they have Warner Brothers, you know, that share goes up a lot.” Referring to whether the deal would get regulatory clearance he added: “I’ll be involved in that decision.”
Paramount stock rose more than 7% in Monday morning trading. Netflix stock was down about 1%. Warner Bros. stock was up about 3%.
—Chris Morris and Joseph Zeballos-Roig contributed to this article.