Financial background of the takeover of the owner of TVN. In the game there are companies from the Middle East
Before the acquisition of Warner Bros. was finalized Discovery Paramount Skydance wants to obtain approval from the US Federal Communications Commission (FCC) for foreign support for the planned transaction, Reuters reported last week. Companies from Saudi Arabia, Qatar and the United Arab Emirates confirmed their support for Paramount's investment. These are: the Saudi Public Investment Fund (PIF), L'imad Holding Company from Abu Dhabi and the Qatar Investment Authority. They are expected to contribute a total of USD 24 billion to the transaction. (approx. PLN 87 billion).
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Takeover of the owner of TVN with foreign financing
Foreign investors would have slightly less than 50 percent. stake in Paramount, and David Ellison's family would continue to control the company's operations. The participation of Arab funds raises concerns among some politicians in the US, but legal advisor Barbara Załęcka-Wysocka emphasizes in an interview with the Wirtualne Media portal that control over the company will remain American and such a co-financed transaction would not pose a threat to WBD.
The lawyer explained the complicated financial procedure of the operation. Her analysis shows that “it is based on debt financing [pożyczka od konsorcjum banków] and a huge injection of equity capital from sovereign funds from the Middle East.” – This process is expected to lead to the entry of a group of powerful institutional investors into the shareholding structure of Paramount, which will significantly diversify the shareholder base, without reducing the total amount of capital involvement – informs Wirtualne Media Barbara Załęcka-Wysocka.
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As the lawyer emphasizes, “until the transaction is closed, the Ellison family members remain responsible to WBD for providing capital.” He also adds that “if any of the Middle East funds fails to meet its obligations, the original investors are obliged to cover this amount.”
After the transaction is completed, the Ellison family and investment firm RedBird will remain the sole owners of Class A shares (with voting rights in Paramount), and syndication investors (i.e. Middle Eastern funds) will hold Class B shares, without voting rights. This means that external partners will not have any influence on decisions regarding the company or, for example, the editorial lines of the acquired media.
