In a dramatic escalation of the battle for control of Warner Bros. Discovery (WBD), Paramount has significantly bolstered its hostile takeover bid with an unprecedented personal guarantee from tech billionaire Larry Ellison.
A Father's Backing: The $40.4 Billion Guarantee
On Monday 22 December 2025, Skydance-owned Paramount announced that Larry Ellison, the founder of Oracle and father of Paramount CEO David Ellison, has provided an "irrevocable personal guarantee" for $40.4 billion of equity financing for the proposed deal. This move directly addresses criticism from the Warner board, which last week argued that Paramount's previous reliance on a revocable family trust was insufficient and misleading to shareholders.
Paramount stated that while Larry Ellison holds the majority of the trust's assets and Warner had not previously requested a personal guarantee, it elected to address WBD's concerns head-on. This guarantee also covers any potential damage claims, putting Ellison's vast personal fortune directly behind his son's ambitious acquisition attempt.
Sweetening the Deal: Higher Breakup Fee and Extended Deadline
Beyond the colossal personal backing, Paramount has further enhanced its offer to make it more attractive to wary Warner shareholders. The company has increased the breakup fee to $5.8 billion if the deal is blocked by regulators, matching the fee offered by Netflix in its competing proposal.
The core value of Paramount's all-cash offer remains at $30 per share, valuing the total bid for Warner's assets—including networks like CNN and Discovery—at approximately $77.9 billion, excluding debt. However, Paramount is extending the window for shareholders to tender their shares, with a new deadline set for 21 January.
A Two-Horse Race: Paramount vs. Netflix
This aggressive manoeuvring sets the stage for a fierce contest between Paramount and streaming giant Netflix. Warner's board has consistently urged its shareholders to support the $72 billion cash-and-stock deal it struck with Netflix earlier in December, which would see Netflix acquire Warner's studio and streaming business.
In a letter to shareholders last week, Warner's board maintained that the Netflix merger terms were superior, dismissing the Paramount-Skydance (PSKY) offer as "illusory." Paramount CEO David Ellison countered, asserting that his company's offer is "the superior option to maximize value for WBD shareholders."
The market reacted positively to the news of Ellison's guarantee. Shares in Paramount-Skydance jumped nearly 7% in Monday morning trading, while Warner Bros. Discovery stock rose over 2%. Netflix shares saw a slight dip of almost 0.7%.
The Associated Press contacted both Warner and Netflix for further comment on Monday, as the media industry watches closely to see which of the two tech-backed entertainment titans will prevail in one of the largest potential media mergers in history.
