Warner Bros Discovery board rejects rival bid from Paramount

By Dawn Chmielewski and Milana Vinn

LOS ANGELES, Dec 17 (Reuters) - Warner Bros Discovery's (WBD) committee rejected Paramount Skydance's (PSKY) $108.4 cardinal hostile bid connected Wednesday, saying it failed to supply capable financing assurances.

In a missive to shareholders, disclosed successful a regulatory filing, the committee wrote that Paramount had "consistently misled" Warner Bros shareholders that its $30-per-share currency connection was afloat guaranteed, oregon "backstopped," by the Ellison family, ​led by billionaire and Oracle (ORCL) CEO Larry Ellison.

"It does not, and ne'er has," the committee wrote of the warrant of Paramount's offer, noting that the connection posed "numerous, important risks."

Warner Bros' committee besides ‌said it recovered Paramount's connection "inferior" to the merger statement with Netflix's (NFLX). The streaming giant's $27.75 per stock connection for Warner Bros' movie and tv studios, its room and the HBO Max streaming work is simply a binding statement that requires nary equity financing and has robust indebtedness commitments, ‌the committee wrote.

Paramount past week took its lawsuit straight to Warner Bros shareholders, arguing that it has arranged "air-tight financing" to enactment its bid, with $41 cardinal successful caller equity assured by the Ellison household and RedBird Capital, and $54 cardinal of indebtedness commitments from Bank of America, Citi and Apollo.

The Warner Bros Discovery committee countered connected Wednesday that Paramount's astir caller connection includes an equity committedness "for which determination is nary Ellison household committedness of immoderate kind," but alternatively the backing of "an chartless and opaque" Lawrence J. Ellison Revocable Trust, whose assets and liabilities are not publically disclosed and are taxable to change.

"Despite having been told repeatedly by WBD however important a afloat and unconditional financing committedness from the Ellison household ⁠was...the Ellison household has chosen not to backstop the PSKY offer," the ‌Warner Bros committee wrote. "A revocable spot is nary replacement for a secured committedness by a controlling shareholder."

Paramount has submitted a full of six bids to get the full Warner Bros studio, including its tv networks, including CNN and TNT Sports.

It has antecedently said the Ellison household spot - which Paramount says contains much than $250 cardinal ‍in assets including astir 1.16 cardinal shares of Oracle - is much than capable to screen the equity commitment.