David Ellison’s Paramount Skydance is said to be turning to new partners in the Middle East to help back his offer to acquire Warner Bros. Discovery in its entirety.
Paramount Skydance has formed an investment consortium with the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi to submit a bid for Warner Bros. Discovery, sources told Variety. The bid is being largely backed by the Ellison family (which owns 100% voting control in Paramount Skydance) with involvement from three Arab countries: Saudi Arabia’s Public Investment Fund (PIF), the Qatar Investment Authority (QIA) and the Abu Dhabi Investment Authority (ADIA), the sources said. In addition, Gerry Cardinale’s RedBird Capital is backing the bid.
Each of the funds would put up $7 billion (for a total of $21 billion); Paramount Skydance would front $50 billion for a proposed WBD acquisition for a total of $71 billion. (It’s not clear if that price tag would be inclusive of debt.) The board of Warner Bros. Discovery had previously rejected a $23.50/share offer from David Ellison.
The board of Warner Bros. Discovery has set a Nov. 20 deadline for initial bids from interested acquirers, which also include Comcast and Netflix.
Separately Tuesday, Saudi Crown Prince Mohammed bin Salman was meeting at the White House with President Trump.
Meanwhile, Comcast co-CEO Brian Roberts traveled to Saudi Arabia in late October to attend a conference in Riyadh hosted by the PIF, Variety has confirmed. He also visited Qiddiya, where the country is building a theme park destination, to scope out the area for a possible Universal park in the area. But it’s not known whether Roberts solicited investment backing from the Saudis for a Warner Bros. bid by Comcast.
Reps for Paramount Skydance, Warner Bros. Discovery and Comcast declined to comment.
Under the scenario in the WBD bid led by Paramount Skydance, the Saudi, Qatar and Abu Dhabi funds would hold small minority stakes in Warner Bros. Discovery. Each of the three would get “an IP, a movie premiere, a movie shoot,” a knowledgeable source told Variety. “All they care about is reputation and soft power,” the source added.
The Saudis do not have “any incentive” to join a prospective Comcast bid for Warner Bros. (excluding WBD’s linear TV networks) because their understanding is that “the Trump administration doesn’t like Comcast CEO Brian Roberts at all,” the source said.
Trump, who has regularly been upset about the coverage of Comcast-owned MSNBC (which is now called MS NOW), earlier this year called Roberts the “chairman of ‘Concast’” and a “lowlife.” Trump has equated the cable news outlet to “an illegal arm of the Democrat Party,” and claimed that Comcast “should be forced to pay vast sums of money for the damage they’ve done to our Country.”