Now that Netflix is out of the way, Tencent is considering investing several hundred million dollars in Paramount’s $110 billion deal for Warner Bros. Discovery, according to Bloomberg.
The Chinese tech giant previously committed $1 billion in equity financing for David Ellison’s bid, but later backed out to avoid raising potential national security concerns with U.S. regulators. The outlet noted that Tencent would be acting as a passive financial investor and may decide not to invest.
Representatives for Paramount and Tencent did not immediately return TheWrap’s request for comment.
Paramount will pay $31 per share in cash to acquire 100% of WBD’s total outstanding shares. The transaction is funded by $47 billion in equity, fully backed by the Ellison Family and RedBird Capital Partners, though it may include other strategic and financial partners at closing.
Tencent already holds a passive stake in Skydance. In addition to Tencent, three Middle Eastern sovereign wealth funds previously committed to provide a combined $24 billion in financing for Paramount’s previous WBD bids, which has prompted some lawmakers to call for a review by the Committee on Foreign Investment in the United Sates.
The deal also includes $54 billion of debt commitments from Bank of America, Citigroup, and Apollo, which includes $15 billion to backstop WBD’s existing bridge facility and $39 billion of incremental new debt. The $54 billion excludes $3.5 billion of bridge financing from these institutions to backstop an existing $3.5 billion revolving credit facility.
Existing Paramount stockholders will have the opportunity to participate in a rights offering of up to $3.25 billion of Class B Paramount stock alongside the new equity investment, which is expected to occur closer to the closing date, at a price of $16.02 per share.
The companies are targeting a shareholder vote for early spring and have said they expect the deal to close in the third quarter of 2026, or by Sept. 30, pending the necessary approvals.
In the event that the deal does not close by then, Paramount has agreed to pay WBD shareholders a 25 cent per share “ticking fee” for each quarter until closing. Paramount has also agreed to pay a $7 billion termination fee in the event that the deal isn’t closed due to regulatory matters.
Shares of Paramount fell 6.8% on Monday, while Tencent shares climbed 1.3%.
