Paramount says Variety report on $71 billion Warner Bros Discovery bid ‘categorically inaccurate’

Audio By Carbonatix

Enlarge

(Reuters) -Paramount Skydance said on Tuesday Variety’s report on the company forming an investment consortium with the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi to submit a total $71 billion bid for Warner Bros Discovery is “categorically inaccurate.”

Shares of Warner Bros Discovery rose 5.5% while Paramount was up about 2% following the news.

Warner Bros Discovery, home to DC film universe and television studios, HBO, CNN, TNT and Warner Bros Games, is on the verge of breaking up, crippled by declines in its television business.

The company said in October it has been considering a range of options including a planned separation, a deal for the entire company, or separate transactions for its Warner Bros or Discovery Global businesses.

The Variety report said, citing sources, that the bid is being largely backed by the Ellison family with involvement from Saudi Arabia’s Public Investment Fund, the Qatar Investment Authority and the Abu Dhabi Investment Authority.

A bid backed by the Ellison family would highlight how newly appointed Paramount CEO David Ellison has leveraged his Silicon Valley connections to expand his media empire, with the backing of his father Larry Ellison, the Oracle co-founder and the world’s second richest person.

Under the deal, the wealth funds would hold small minority stakes in the company and each would get “an IP, a movie premiere, a movie shoot,” the report said, citing a source.

Each of the funds would put up $7 billion (for a total of $21 billion); Paramount Skydance would front $50 billion, as per the report.

Warner Bros Discovery, PIF, QIA and ADIA did not immediately respond to Reuters requests for comment.

Reuters reported that Comcast and Netflix have also explored bids for the Warner Bros Discovery’s assets.

The initial deadline to submit non-binding first-round bids for the company is November 20.

(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Alan Barona)