Paramount Skydance on Monday amended its takeover offer for Warner Bros. Discovery but at least one major WBD shareholder was not impressed.
“The changes in Paramount’s new offer were necessary, but not sufficient,” Harris Oakmark, portfolio manager and Director of U.S. Research Alex Fitch, told Reuters after the new Paramount proposal was revealed.
Oakmark, identified by Reuters as Warner Bros’ fifth largest shareholder, owning 96 million shares or about 4% of shares as of the end of September, indicated that the David Ellison-led and Larry Ellison-backed Paramount will need to step up further to have a chance of snatching WBD away from bidding war winner Netflix.
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“We see the two deals as a toss-up, and there is a cost to changing paths,” he said. “If Paramount is serious about winning, they’re going to need to provide a greater incentive.”
Warner Bros. Discovery on Monday advised its shareholders “not to take any action at this time with respect to the amended Paramount Skydance tender offer,” which now includes a $40.4 billion personal equity financing guarantee by Larry Ellison (the Oracle co-founder and father of Paramount CEO David Ellison); an enhanced $5.8 billion breakup fee; and increased financial flexibility during an interim period.
The core financial terms of Paramount’s new proposal have remained the same as in the recently rebuffed by WBD hostile tender offer made December 8: acquiring all of WBD’s outstanding shares for $30 each in cash.
