Larry Ellison Steps In as Oracle Chairman
Family Assets Protected from Transfer
The Paramount-Skydance consortium, which has launched a hostile merger and acquisition (M&A) bid for Warner Bros. Discovery, is making significant efforts to address concerns among Warner Bros. shareholders, reigniting the battle for control of Warner Bros. Larry Ellison, the billionaire chairman of Oracle, has pledged a personal guarantee of $40.4 billion (approximately 60 trillion won) to support his son, David Ellison, the CEO of Paramount.
On December 22 (local time), Paramount announced in a public statement that it would further strengthen its commitment to funding from the family trust of CEO David Ellison, in response to concerns recently raised by Warner Bros. shareholders.
Paramount stated that Oracle founder and controlling shareholder Larry Ellison has agreed to provide an irrevocable personal guarantee for the financing of the acquisition, as well as for any indemnity claims against Paramount. The company also said, "During the course of the acquisition, we have agreed not to dissolve the Ellison family trust or transfer its assets in a manner that would be detrimental."
In effect, Larry Ellison, chairman of Oracle, and his family trust have committed to backing his son David Ellison’s attempt to acquire Warner Bros. as CEO of Paramount.
The breakup fee for terminating the contract has been raised from the previous $5 billion to $5.8 billion.
Following this news, Paramount and Warner Bros. shares closed up by 4.29% and 3.53%, respectively, on the New York Stock Exchange that day.
Previously, Warner Bros. had agreed to sell its studio and HBO Max streaming service divisions to Netflix at $27.75 per share. However, after losing out to Netflix in the competitive bidding, Paramount raised its offer for the entirety of Warner Bros. to $30 per share in a public tender offer.
Nevertheless, Warner Bros. advised shareholders to reject Paramount's proposal, stating that the acquisition plan presented by Netflix was superior. The company argued that Paramount's offer was merely an illusion and insisted that the Ellison side needed to present a more binding personal funding commitment.
David Ellison, CEO of Paramount, said on the same day, "We have repeatedly demonstrated our commitment to acquiring Warner Bros. Our fully funded, all-cash offer remains the best option to maximize value for Warner Bros. shareholders."
Meanwhile, Netflix has secured approximately $25 billion in bank financing for its acquisition deal with Warner Bros. on the same day.
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