Paramount Skydance confirmed syndication agreements with Middle Eastern funds to back its proposed acquisition of Warner Bros. Discovery and said it believes that the “resulting diversification of its shareholder base, the potential for strategic and commercial opportunities with the various Equity Syndication Parties … [will] enhance long-term shareholder value.”
It confirmed in an SEC filing that public Investment Fund, L’Imad an Abu Dhabi sovereign wealth fund, and TMT Holding, an investment vehicle of the Qatar Investment Authority, have committed to financing as well as LionTree Investment Fund and, of course, affiliates of the Ellisons and RedBird.
“PSKY believes the successful Equity Syndication is an important milestone in the WBD transaction process, and that the resulting diversification of its shareholder base, the potential for strategic and commercial opportunities with the various Equity Syndication Parties, and the value of the Warrants described below, enhance long-term shareholder value. PSKY also believes the Warrants support its longer term objective of a wider and deeper public float.” The issuing of warrants to Paramount shareholders is new and sent Paramount stock shooting higher today. More on that later.
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A notable Ellison Guarantee written into the Par-WBD merger agreement requires the billionaire to step up with the full amount equity if the other partners back out. The deal, with an enterprise value of $110 billion, includes a total of $45.72 billion in equity funding.
“The Syndication Assignments do not relieve the Equity Investors of their obligations under the Subscription Agreements or the Ellison Guarantee. To the extent that any Equity Syndication Party does not perform under its Syndication Assignment, the obligation of the Equity Investors to fund the related amount of the Commitments would continue to be required under the Subscription Agreements and the Ellison Guarantee.” It would cover the ticking fee, termination fees, potential damages and other costs and other merger-related expenses.
More to come