Paramount's Ellison attempted to entice Zaslav but ultimately failed to secure Warner Bros. Discovery. Despite his strenuous efforts, he lost out to Netflix, prompting Ellison to shift tactics from carrots to sticks. Paramount Skydance is now pursuing a hostile takeover bid for Warner Bros. Discovery, directly targeting shareholders. New details from a Paramount SEC filing reveal the extent of Ellison's attempts to secure a pact with David Zaslav, president and CEO of Warner Bros. Discovery. Ellison went to great lengths to court Zaslav, hosting him at a dinner with his father, Larry Ellison. They met at Zaslav's home in Beverly Hills to discuss a potential deal, and Larry Ellison even participated in a videoconference with Zaslav and John Malone, chairman emeritus of Warner Bros. and a major shareholder, to discuss Paramount's interest in a combination with Warner Bros. David Ellison and his team at Paramount Skydance, along with their legal and financial advisors, worked tirelessly over Thanksgiving to craft a more compelling offer to buy all of Warner Bros. Discovery, ultimately extending an all-cash offer of $30 per share, with an equity value of $77.9 billion. Ellison even offered Zaslav a co-CEO and co-chairman role in a combined Paramount-Warner Bros. Discovery. Ellison expressed his enthusiasm, stating, 'It would be the honor of a lifetime to be your partner and to be the owner of these iconic assets.' However, the Warner Bros. Discovery board rejected every proposal Ellison put forward, and on December 5th, the company announced a deal with Netflix to sell Warner Bros. studios and HBO Max for an equity value of $72 billion. Ellison, feeling that the Warner Bros. Discovery board hadn't treated him fairly, continued his pursuit. On December 4th, he sent a text to Zaslav, expressing his belief that they had addressed his concerns in their new proposal and inviting him to discuss it further. However, neither Zaslav nor any representative of Warner Bros. Discovery responded. On December 4th, news outlets reported that Warner Bros. had entered into an exclusivity agreement with Netflix. The Paramount SEC filing revealed that Warner Bros. Discovery and Paramount spent significant time negotiating the terms of a confidentiality agreement, which included restrictions on contact with the Warner Bros. Board and requirements for seeking permission before engaging with debt or equity financing sources. They also clashed over foreign financing, with Warner Bros. Discovery aiming to avoid review by the Committee on Foreign Investment in the United States (CFIUS). According to Paramount's deal terms, the Middle Eastern sovereign wealth funds and Jared Kushner's Affinity Partners were backing the $30 per share offer, along with Larry Ellison and RedBird Capital Partners. However, the Arab wealth funds and Kushner's Affinity Partners agreed to waive their governance rights, ensuring the deal wouldn't require CFIUS review. Additionally, Chinese internet company Tencent, previously committed to the WBD takeover deal, was no longer a financing partner. Before the Skydance-Paramount deal was reached in mid-2024, Warner Bros. Discovery and Shari Redstone's Paramount Global had discussed combinations in 2023 and 2024. Zaslav met with Paramount's then-CEO Bob Bakish in December 2023 to explore a possible WBD-Paramount merger. While discussions continued through April 2024, Warner Bros. Discovery never submitted a formal bid for Paramount Global. Paramount's SEC filing provided a detailed chronology of events, documenting Ellison's efforts to secure the WBD deal. Following the Paramount-Skydance merger on August 7th, Paramount execs and board members discussed industry dynamics and the merits of acquiring Warner Bros. They determined that the combination was compelling, and with Warner Bros.' plan to break up the company, Paramount concluded that time was of the essence. Key dates in the timeline include September 11th, when Paramount was reported to be preparing an offer for Warner Bros. Discovery, driving up WBD's stock price. On September 14th, David Ellison met with Zaslav and presented a proposal, offering $19 per share, with 60% in cash and 40% in Paramount stock. This proposal was rejected by the Warner Bros. Board on September 22nd, citing it as inadequate. Paramount continued to refine their offer, with Ellison delivering a revised proposal on September 30th, offering $22 per share. This proposal was also rejected, with Warner Bros. expressing a preference for their separation plan. Paramount's efforts intensified, with Ellison sending a text to Zaslav on December 4th, expressing his belief that they had addressed his concerns. However, the Warner Bros. Board continued to reject proposals, with Paramount ultimately submitting an all-cash offer of $30 per share on December 4th, which was also rejected. On December 4th, Paramount submitted an all-cash offer of $30 per share, which was rejected by the Warner Bros. Board. The Paramount filing detailed the evolution of the offer, from $19 per share to $26.50 per share, reflecting the board's feedback and adjustments to address concerns. The final offer, made on December 4th, was for $30 per share, but it was too late, as Netflix had already secured the deal.
