Key Stats for $WBD Stock
- Price Change for $WBD stock: 3.5%
- $WBD Share Price as of Dec. 22: $28.75
- 52-Week High: $30
- $WBD Stock Price Target: $27.25
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What Happened?
Warner Bros. Discovery (WBD) stock climbed 3% on Monday after Paramount Skydance guaranteed that billionaire Larry Ellison would personally back its $30-per-share cash offer for Warner Bros. Discovery.
The move directly addresses concerns raised by the WBD board about the financing behind Paramount’s hostile bid.
Larry Ellison, father of Paramount CEO David Ellison and co-founder of Oracle, agreed to provide an irrevocable personal guarantee of $40.4 billion in equity financing for the offer.
Paramount said the guarantee also covers any potential damages claims. Ellison committed not to revoke the family trust or transfer its assets during the pending transaction.
The guarantee doesn’t replace existing commitments from RedBird Capital and sovereign wealth funds but adds an extra layer of security.
This amended offer comes as Paramount tries to derail Warner Bros. Discovery’s existing agreement with Netflix.
WBD agreed earlier this month to sell its studio and streaming assets to Netflix in a deal valued at $27.75 per share, or roughly $83 billion on an enterprise basis. Netflix’s deal includes Warner Bros.’ film studio and HBO Max, while WBD would spin off its TV networks business as Discovery Global.
Paramount wants to buy all of Warner Bros. Discovery, including the TV networks’ portfolio. The company says its $30 all-cash offer delivers superior value with an enterprise value of $108.4 billion.
Paramount notably did not increase its bid on Monday but did raise its proposed reverse breakup fee to match Netflix’s $5.8 billion.
Last week, WBD Chairman Samuel Di Piazza told CNBC the board had concerns about Larry Ellison’s backing. “We were not confident that one of the richest people in the world would be there at closing,” Di Piazza said. “Doing a deal is great; closing a deal is better.”
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What the Market Is Telling Us About WBD Stock
The 3% pop in WBD stock suggests investors see value in having competing bids on the table. Paramount’s $30 per share all-cash offer represents about $2.25 more per share than Netflix’s headline value of $27.75, which includes both cash and Netflix stock.
During a CNBC appearance Monday, Gerry Cardinale of RedBird Capital Partners said the amended filing “cleared the brush of obfuscation” around Paramount’s offer.
Cardinale emphasized that Larry Ellison’s irrevocable guarantee is backed by 1.2 billion Oracle shares. “At the end of the day, the shareholders own this company,” Cardinale said, appealing directly to WBD stock holders to evaluate both offers.
Warner Bros. Discovery confirmed it received the amended proposal and said it would “carefully review and consider Paramount Skydance’s offer in accordance with the terms of Warner Bros. Discovery’s agreement with Netflix.”
Beyond the question of price, regulatory approval remains a major wildcard. Paramount argues that combining Netflix’s 300 million subscribers with HBO Max’s 128 million would create unhealthy streaming dominance. “The Netflix deal kills competition,” Cardinale said, noting the combined platform would control 420 million subscribers.
Netflix co-CEOs Ted Sarandos and Greg Peters have said they’re confident their deal would pass regulatory review. Sarandos argued the transaction would preserve jobs during a period of mounting industry layoffs.
For WBD stock investors, the key question is which path delivers more value with greater certainty. Paramount’s all-cash offer provides immediate liquidity. Netflix’s mixed cash-and-stock deal leaves shareholders exposed to both Netflix stock volatility and the uncertain value of the spun-off TV networks business.
The revised Paramount offer with Larry Ellison’s personal guarantee removes one major objection from the WBD board. Whether that’s enough to reopen negotiations or prompt a counterbid from Netflix remains to be seen. Until then, WBD stock appears to be benefiting from the competition.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
