Larry Ellison offers a guarantee of $40.4 billion to Paramount for the purchase of Warner Bros.

Billionaire tycoon Larry Ellison, co-founder of technology giant Oracle and father of David Ellison, CEO of Paramountoffered a personal guarantee of $40.4 billion to acquire Warner Bros. Discovery (WBD). In a statement released this Monday, Paramount Skydance indicates that Ellison has agreed to grant this guarantee of 40.4 billion dollars of equity financing for the offering and for any claim for damages against Paramount.

Thus, the businessman has agreed not to revoke the Ellison family trust nor transfer its assets “in a detrimental manner” while the transaction is in progress. However, Paramount maintains its offer to acquire the entire company for $30 per share in cashwhich would place the value of the transaction at about 108.4 billion dollars, thus exceeding the 27.75 dollars per share offered by Netflix just a few days before (82.7 billion dollars, just over 71.021 million euros at the current exchange rate).

The news comes just a week after WBD’s board of directors unanimously rejected Paramount’s takeover bid. consider that it did not benefit its shareholders nor did it improve the merger agreement signed with Netflix. According to the company note published this Monday, the company has modified its offer “to address WBD concerns”which stated that its value was “insufficient” and entailed “significant risks and costs.”

Paramount has been seeking for months to close the purchase of Warner Bros. and the battle for one of the most emblematic studios in Hollywood has taken on an increasingly harsh tone. David Ellison was surprised earlier this month when the board of directors agreed to a deal with Netflix for 82.7 billion for the streaming assets and the studio. After this, Paramount launched a hostile takeover bidwhich is addressed to shareholders. Warner Bros.’ top corporate governance body urged rejection of the proposal, which includes debt commitments for 54,000 million dollars, considering it “inadequate” and lower price.

WBD reached an agreement with Netflix earlier this month to sell the company for $82.7 billion, including debt. Next, Paramount entered the scene with its hostile takeover bid. Netflix had agreed to pay $27.75 per share, in a combination of cash and stock, for Warner studios and the HBO Max streaming service. Paramount shares are trading with a rebound of 7.7%, up to $14.05 per share.

It so happens that Trump himself assured on Sunday that he would have a say in the merger proposal between Netflix and Warner Bros, understanding that the market share resulting from the operation “could be a problem.” The agreement, which could reshape the entertainment industry, has to “go through a process and we will see what happens,” the US president said.

The market is divided between those who see it as a defensive move to secure content and those who see it as a defensive move. They consider a high risk in a sector with tense margins. Questions about competition have also been raised in Washington. The battle comes at a time when major studios and platforms face pressures from production costs, audience fragmentation and a slowdown in subscriber growth.

In any case, whoever wins, the war will mean greater business concentration in the United States in a sector dominated by a handful of large groups that monopolize film, media, television and streaming and that will change the map of entertainment.