David Zaslav has laid down a clear challenge to David Ellison, the head of Paramount Skydance: “Get serious or go home.” This message comes as Zaslav, the CEO of Warner Bros. Discovery, reportedly told Ellison that his initial bid of around $20 per share may not cut it. To secure the deal, he hinted that Ellison might have to raise his offer to more than $30 a share.
Mr. Ellison is expected to make a formal bid for Paramount soon, only months after acquiring it for $8 billion. This is a noticeable shift from the earlier lackluster interest reported lately.
However, those close to the negotiations say Ellison, the 42-year-old son of software magnate Larry Ellison and a Trump supporter now sitting on a massive fortune, is still sending confusing signals regarding his proposals.
It seems that Ellison is trying to apply pressure on Zaslav by claiming that his bid is the only one in play. He argues that if he doesn’t have the rights to acquire the entire company, not just its streaming and studio segments, Zaslav’s stock price could fall. Insiders suggest that Ellison believes antitrust issues will deter other major media players from participating in high-stakes bidding.
Nonetheless, Ellison needs to be cautious. His lawyers have warned him that pursuing a hostile takeover could be risky, as many large investment firms are currently hesitant to engage in aggressive mergers and acquisitions.
Meanwhile, Zaslav—often referred to as “Zasz”—believes he can compel Ellison to pay a considerable premium above WBD’s current stock price, which is around $18. He plans to split WBD into two divisions, with the deal anticipated to finalize in May. Analysts value the unit containing his streaming and studio operations, which has minimal debt, at about $30.
Beyond that, WBD’s board appears to back Zaslav in a prolonged contest with Ellison. Zaslav also thinks there’s a reasonable chance that under the current administration, regulators would greenlight potential acquisitions of WBD by companies like Comcast, Netflix, Amazon, and Apple—all reportedly interested in a deal post-split.
Given Zaslav’s stance, he wonders, if Ellison is genuinely interested and capable of financing such a deal, why hasn’t he made a more substantial offer yet?
According to one insider, unless Ellison delivers a serious offer—a kind he hasn’t yet provided—Zaslav sees no need to rush the process.
While Zaslav’s representatives have not commented, Ellison’s spokesperson has not responded to requests for input either.
Other potential bidders such as Comcast, Netflix, Amazon, and Apple are showing keen interest in a deal stemming from WBD Studios and its streaming service, which has produced popular content.
Though Zaslav is a seasoned media executive who got his start at NBC Universal, he hasn’t ruled out selling to Ellison. “Every company is on sale at a fair price,” he’s been quoted as saying.
Yet, there’s a crucial factor: proof that Ellison has the resources to make a substantial purchase. Given the financial troubles at Paramount Skydance, borrowing may be necessary to meet the estimated $60 billion premium Zaslav is seeking. Reports indicate that Ellison is negotiating with private equity firms, including Apollo, for funding.
To make the numbers align, Ellison may also have to access his father’s significant wealth (which is nearly $400 billion). Still, some analysts are skeptical about whether Larry Ellison would want to sell his $30 billion stake in Oracle to fund this acquisition, especially since he could have easily done so earlier.
People involved in the acquisition talks believe one reason Ellison may act quickly is to avoid a bidding war for WBD assets once the company is separated into its streaming and studio operations versus more traditional cable assets.
In short, while Ellison is looking to broaden his media empire exponentially with WBD, the costs involved far exceed what he originally paid for Paramount. It’s a challenging proposition, considering he’s working with a mid-sized studio and a struggling streaming service.
A source noted, “With his father not present, David is left with the No. 3 studio and declining assets and is trying to take over something three times its size. If he really wants it, he’ll need to pay up.”
