According to agency sources who spoke on condition of anonymity, a response to Paramount's proposal may be presented as early as Wednesday. However, the situation is dynamic and decisions may still change.
The rest of the article below the video:
Both Warner Bros. and Paramount declined to comment on the matter to Bloomberg.
One of the key issues that raise doubts among Warner Bros. management, is the financing structure proposed by Paramount. Much of the capital comes from a trust fund managed by the Ellison family. This, as Bloomberg's sources note, may pose a risk because assets in such a fund can be withdrawn at any time. Additionally, Warner Bros. is concerned about Paramount's ability to operate while it waits for regulatory approval, which could take a year or more.
Read also: Takeover of the owner of TVN. Will the giants outbid? The fight is intensifying
Paramount, which owns brands including CBS and MTV, made a statement last week addressing these concerns. The company proposed, among others: security of USD 5 billion termination fees for the Ellison family and modified other terms of the offer. About $1 billion financing from China's Tencent Holdings Ltd. was withdrawn, however, due to potential national security concerns from U.S. regulators.
Warner Bros. recently reached an agreement with Netflix to sell its studios, streaming operations and HBO for $27.75 per share, bringing the total transaction value to approximately $83 billion.including debt. In preparation for the closing of this transaction, Warner Bros. plans to spin off its cable networks, such as CNN and TNT, and give them to its shareholders.
Read also: The Chinese giant wanted to take over Warner Bros Discovery. He gave up for fear of being controlled by the US
Paramount, in turn, offered to purchase all of Warner Bros. for USD 30 per share, which corresponds to a value of over USD 108 billion, including debt. After the announcement of the Warner Bros. deal with Netflix, Paramount addressed its offer directly to shareholders, announcing a public tender offer for the sale of Warner Bros. shares.
