Middle-Eastern funding turned WBD off Paramount bid
Middle-Eastern funding turned WBD off Paramount bid
A new report indicates one major reason WBD shrugged off Paramount’s bid for its assets is the source of the funding Paramount was able to pull together.
The attempt by Paramount Skydance to acquire Warner Bros. Discovery isn’t over by a long shot. Paramount has now launched a hostile takeover attempt of WBD, after that company chose Netflix’s bid following an auction process for its assets. Now, a new report indicates that Middle-Eastern sources of funding were a major reason why WBD decided to sidestep Paramount’s attempts to acquire it in the first place.
Key Details:
- Pass the plate: Paramount solicited funds from Emirati, Qatari, and Saudi investors.
- Still present: That funding is still part of Paramount’s hostile takeover bid.
- Not so clear: Fuzziness on the details of how that money would clear gave WBD enough pause to go with Netflix.
Per reporting from Semafor, Paramount solicited $24 billion in funding from Emirati, Qatari, and Saudi sovereign wealth funds as part of its bid for WBD, and that money was included in its initial bids, as well as the $108 billion hostile takeover it is now embarked upon.
The fact that the money came from abroad was not itself the reason for WBD’s reluctance to accept Paramount’s bid. Rather, the guarantees on that money did not give WBD enough certainty on when it would clear, and that made the company’s board more comfortable accepting Netflix’s $83 billion bid instead.
Although Paramount CEO David Ellison’s father, Larry, is one of the world’s richest people, pulling together the funding for a bid of this size required outside investment. Paramount also pulled funding from RedBird Capital and Apollo Global Management to make its offer for WBD.
Warner’s board has now officially responded to the hostile takeover attempt by Paramount, saying that while it will “carefully review and consider” the new offer made, it has not modified its recommendation to accept the Netflix offer instead. WBD says it will advise stockholders of the board’s recommendation regarding Paramount’s hostile takeover attempt in the next 10 days.
Considering the fact that the funding that made WBD so leery of Paramount’s original offer is still a part of its takeover bid, that recommendation seems unlikely to change as of now. The next few days may tell a different story, however, and Netflix’s purchase of WBD is far from a done deal.
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