Paramount Skydance has confirmed speculation that Middle Eastern funds are partly backing its acquisition of Warner Bros. Discovery.
More specifically, the capital comes from the Saudi Public Investment Fund, LAMAD, Abu Dhabi’s sovereign wealth fund, and the Qatar Investment Authority, the fund of the Qatar Investment Authority. The Ellison family, RedBird Capital and LionTree Investment Fund are also among the equity shareholders; LionTree is a newcomer to the deal — at least publicly.
In its 8-K filing with the Securities and Exchange Commission, Paramount Skydance cited the importance of “diversification” in its shareholder base as well as the “strategic and business opportunities” offered by each of the equity partners. Tuesday’s filing said the conglomerate “will enhance shareholder value in the long term.”
It’s not immediately clear what the strategic and business opportunities are, although Warners has the Warner Bros. universe in mind. In Abu Dhabi, several Middle Eastern funds are seen as keen to invest in US technology and media giants.
The 8-K went on to assert that the Ellison Guarantee remains “in full force and effect according to its original terms.” The Ellison Guarantee refers to the personal guarantee given by Larry Ellison, founder of Oracle, to back his son’s Warner deal, should any other stock deals fall through. It is not immediately clear whether David Ellison will pursue other partners in Warners shares.
Originally, Netflix was willing to buy Warner Bros. Cut from Warner Bros. Discovery, following a pre-planned split and spin-off. However, David Ellison, who recently merged Skydance with Paramount Global, will not be denied. His $111 billion offer for the entire WBD was ultimately considered the superior offer — and now we know where much of that money comes from.
Paramount confirmed last year that it had used money from the Middle East to support a previous bid to buy Warner, an offer that was ultimately rejected in favor of Netflix. The company has been silent so far on whether these funds will support its new deal.
While the Ellison family will control the combined company, it is not clear how much stake the new owners will have yet.
