Backed by ‘Bank of Dad,’ Paramount Makes Another Push For Warner Bros. Discovery

Core Viewpoint - Paramount's amended bid for Warner Bros. Discovery (WBD) includes a personal guarantee of $40.4 billion from Larry Ellison, which aims to address previous concerns about the financial backing of the offer [2]. Group 1: Paramount's Bid and Financial Backing - Paramount's all-cash offer for WBD is valued at $109 billion, with the financial backing being a significant concern [2]. - Larry Ellison's financial support was previously deemed "illusory" by WBD's board, but the new guarantee may influence the decision-making process [2]. - The offer could lead to WBD rejecting Paramount's bid for the eighth time if they choose to remain with Netflix [2]. Group 2: WBD Shareholder Sentiment - Analysts suggest that WBD shareholders may not be swayed by the revised bid's guarantee from Larry Ellison, indicating a lack of significant impact on their voting intentions [3]. - Some analysts express confidence in Netflix's ability to manage its balance sheet despite the return to debt financing [3]. Group 3: Netflix's Financing Strategy - Netflix's bid for WBD is partially supported by $59 billion in temporary debt financing, which is expected to be replaced by a combination of bonds and loans [5]. - This marks a return to debt financing for Netflix, reminiscent of its earlier "Debtflix" days, raising concerns about potential downgrades of its bond ratings [5]. - Morgan Stanley analysts have warned that new debt could lower Netflix's bond ratings to BBB, the lowest tier of investment grade [5].