Paramount Considers Inviting Musk to Invest to Share Warner Acquisition Costs

Paramount executives are internally discussing inviting Musk to join a consortium of equity investors to provide new cash sources for the acquisition of Warner Bros. Discovery. Musk is just one of several billionaires being considered, and Paramount has not yet made a formal invitation to him, nor has his interest been confirmed, and the potential investment amount is also undecided.

The deal is a cash acquisition at $31 per share, with a total value of approximately $110 billion. In December 2025, Netflix reached an agreement with Warner for $27.75 per share, with an enterprise value of about $82.7 billion, after which Paramount launched a hostile takeover bid at $30 per share. In February 2026, Paramount raised its offer, and the Warner board deemed its proposal superior, leading Netflix to withdraw. In April, Warner shareholders voted to approve the merger.

The transaction requires about $47 billion in equity financing. Paramount CEO David Ellison's father, Oracle founder Larry Ellison, provided an irrevocable personal guarantee for over $40 billion of the equity contribution. The debt side is provided by Bank of America, Citigroup, and Apollo, with the bridge loan commitment reduced from an initial $54 billion to $49 billion. Bringing in more shareholders can directly alleviate Larry Ellison's personal funding pressure.

Among existing shareholders, foreign capital accounts for 49.5%, all of which are non-voting shares, with no board seats or governance rights. The Saudi Public Investment Fund holds 15.1%, UAE's L'imad Holding holds 12.8%, Qatar Investment Authority holds 10.6%, limited partners of RedBird Capital hold 5.8%, and overseas shareholders of Paramount's Class B shares hold 5.2%. A fund under LionTree is also participating in the investment.

Musk and Larry Ellison have had a close relationship. Larry Ellison bought Tesla stock in 2018 and served on Tesla's board for several years. In 2022, when Musk privatized Twitter (now X) for $44 billion, he invested $1 billion. If Musk invests, he would indirectly hold shares in companies owning CNN and CBS while controlling X, raising political concerns.

In market mechanics, the buyers are a consortium of the Ellison family, Gulf sovereign funds, and private equity, while the sellers are all shareholders of Warner Bros. Discovery, exiting at a cash premium of $31 per share. This is a typical event-driven transaction: funding comes from three sources: personal wealth supported by Oracle stock, Middle Eastern sovereign funds, and loans from three financial institutions, ultimately flowing into traditional film and news assets. Beneficiaries include three categories: Warner shareholders cashing out at a premium, banks earning financing fees, and the Ellison family gaining control with only partial funding. The pressured parties include Netflix, which failed in its bid, employees of the two companies facing integration, and existing Paramount shareholders who may be diluted by new shareholders.

Regulatory obstacles have been largely cleared. Twelve state attorneys general, led by California, previously sued to block the merger, but a settlement was reached in September. Paramount has committed to releasing at least 30 theatrical films annually for the first two years post-closing, then 32 films annually for the next three years, including at least four independent films each year; an additional $300 million in domestic production spending per year for five years, totaling $1.5 billion; and establishing an independent editorial committee for CBS and CNN. The U.S. Department of Justice, the European Commission, and the UK's Competition and Markets Authority have all previously cleared the deal, which is expected to close in about two weeks. If the deal is not completed by the end of 2026, Paramount will need to pay Warner shareholders an additional approximately $650 million quarterly.

Source: Public Information