In a significant development shaking the media industry, Paramount Skydance Corp has officially denied reports claiming it is collaborating with Middle Eastern sovereign wealth funds on a massive $71 billion acquisition offer for Warner Bros. Discovery Inc.
Denial and Official Statement
Paramount Skydance has categorically labeled a Variety report as "inaccurate." The publication had alleged that David Ellison's company was working with Saudi Arabia's Public Investment Fund, the Qatar Investment Authority, and the Abu Dhabi Investment Authority to assemble a bid. A spokesperson for Paramount clarified to Bloomberg, "The information Variety published is categorically inaccurate," emphasizing respect for the confidential nature of the ongoing process and a commitment to refrain from further comment until its conclusion.
Details of the Reported Bid
According to the initial Variety report, the proposed offer would value Warner Bros. Discovery at approximately $28.65 per share, based on outstanding shares. The financial structure was reportedly set to be largely backed by the Ellison family, with Gerry Cardinale's RedBird Capital also providing support. The report claimed each of the three sovereign wealth funds would contribute $7 billion, while Paramount Skydance would lay out a substantial $50 billion. This comes after Bloomberg reported that the Warner Bros. board had previously rejected multiple offers from Paramount, with values reaching up to $23.50 per share.
Market Reaction and Broader Context
The news immediately impacted stock markets. Warner Bros. shares surged as much as 6.4% in New York following the Variety report, before paring some of those gains. Paramount shares also experienced an upward trend, rising as much as 3.7%. Warner Bros. Discovery, the parent company of HBO, CNN, and its famous film studio, initiated a sale process in October after attracting interest from several parties and has set a deadline for bids. While other players like Netflix Inc. and Comcast Corp. are expected to bid for parts of the business, Paramount remains the only party reportedly interested in acquiring the entire company.
A potential merger between these two media behemoths would dramatically reshape the entertainment landscape, uniting two major movie studios and two of the world's most influential news networks. Such a consolidation is certain to attract intense regulatory scrutiny. David Ellison, son of Oracle Corp. Chairman Larry Ellison, has been aggressively pursuing Warner Bros., fresh from the $8 billion purchase of Paramount in August. Meanwhile, Warner Bros. CEO David Zaslav is said to favor splitting the company, believing the film and streaming assets could command a higher value if separated from the cable TV division.
