Paramount bid raises security concerns

Congressional Democrats are sounding alarms over the deep involvement of Saudi Arabian and other Middle Eastern royal families in Paramount’s proposed bid for Warner Bros. Discovery.

- By MEG JAMES

BRENDAN SMIALOWSKI AFP/Getty Images SOME DEMOCRATS in Congress see the involvement of Saudi Crown Prince Mohammed bin Salman, shown with President Trump, as cause for concern.

Warner Bros. Discovery owns CNN, HBO and the Warner Bros. film and television studios in Burbank behind such beloved American classics as “Casablanca,” “Citizen Kane” and Bugs Bunny, and blockbuster hits including “Harry Potter,” “Dirty Harry,” “The Matrix” and “Friends.”

Late last week, Paramount, which is controlled by billionaire Larry Ellison’s family, came up short in the bidding for Warner Bros., in part over the Warner board’s concerns about the financing of the deal. On Monday, Paramount launched a hostile takeover of Warner Bros., appealing directly to Warner shareholders — asking them to sell their stock to Paramount for $30 a share.

On Wednesday, Paramount sent a letter to Warner shareholders asking that they tender their shares, which would allow Paramount to acquire the company through its hostile takeover.

In the letter to Warner shareholders, Ellison’s son, David, who is Paramount's chairman, wrote: “Our public offer ... delivers superior value and a faster, more certain path to completion than the transaction announced with Netflix.”

It added that Paramount’s offer would be “financed by $41 billion of new equity backstopped by the Ellison family and RedBird Capital and $54 billion of debt commitments from Bank of America, Citi and Apollo.”

It did not disclose that the sovereign wealth funds were the majority of the new equity. Paramount’s gambit has thrown the auction, and the Warner board's selection of Netflix’s $72-billion deal, into doubt.

Paramount has long insisted that it represents the best partner for Warner Bros., in part because of the Ellison family’s cozy relations with President Trump. The company has trumpeted its ability to gain the blessing of the Trump administration for its proposed deal.