Paramount’s second round bid for Warner Bros. Discovery includes backing from Middle Eastern sovereign wealth funds, TheWrap has learned.
The all-cash offer is primarily backed by the Ellison family. TheWrap previously reported that Paramount was in talks with Saudi Arabia’s Public Investment Fund (PIF), the Qatar Investment Authority (QIA) and the Abu Dhabi Investment Authority (ADIA) about investing in its bid despite the media giant’s previous public denials. The bid also includes debt financing from Apollo Global Management.
The involvement of foreign investors in the latest bid could require approval from the Committee on Foreign Investment in the United States (CFIUS) if they were to obtain 25% or more voting interest in a U.S. company and a foreign government holds a 49% or greater voting interest in that foreign investor.
The Ellisons are expected to maintain majority ownership in a combined company and foreign investors’ involvement is not expected to reach the level that would trigger a regulatory review, a person familiar with the bid told TheWrap.
Financial terms of the bid could not immediately be learned. Representatives for Paramount and Apollo declined to comment. PIF, QIA and ADIA did not immediately return TheWrap’s request for comment.
The latest round comes after the David Zaslav-led media giant asked bidders to submit improved offers following the first round of non-binding bids last month.
Paramount has submitted multiple bids for all of WBD, including three that came before the bidding rounds, which were rejected for being too low. Meanwhile, Netflix and Comcast have submitted bids for the company’s studio and streaming business. Netflix’s latest offer was a majority cash bid.
In addition to continuing on with its planned split into Warner Bros. and Discovery Global, which is on track for completion in April, the company’s board is also considering separate transactions for the two companies or a deal for the entire combined company. WBD said it would also consider an alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global to its shareholders.
It’s unclear whether WBD will ask for a third round of bids or enter exclusive talks with one of the companies as a next step. A final decision is expected to be made around Christmas.
