Paramount weighs asking Musk for equity cash to close Warner deal
Paramount executives have discussed asking Elon Musk for equity cash to help close the purchase of Warner Bros. Discovery, according to a Semafor report cited by Deadline on September 23.
Equity here means money in exchange for a slice of ownership. Semafor reported that the size of any Musk cheque could not be learned, and Paramount declined to comment on the report, according to Deadline.
Musk is one of a number of wealthy individuals that Paramount, led by chief executive David Ellison, has considered approaching to join a syndicate of equity investors, per Semafor. The talks are not a done deal. Nothing has been signed.
Paramount is seeking fresh sources of cash to firm up its financial picture as it digests Warner Bros. Discovery, Semafor reported. The company has said the Warner deal should take about two weeks to officially close after the settlement announcement on September 21, according to Deadline.
That settlement resolved an antitrust lawsuit brought by a dozen state attorneys general led by California Attorney General Rob Bonta, according to Deadline. Antitrust means competition law, the rules that decide whether a merger can go ahead. News of progress in the California settlement talks lifted Warner Bros. and Paramount shares, Reuters reported on September 21.
The funding stack is already crowded. Larry Ellison personally committed to backstop more than $40 billion in equity financing for the Warner deal, according to Deadline. Backstop means a promise to cover the money if other investors fall short. A trio of Middle Eastern sovereign wealth funds led by Saudi Arabia agreed to invest and will hold a combined equity stake of just under 50% in the combined company, according to Deadline.
What makes this stand out is the history between the names. Larry Ellison put $1 billion into Musk's 2022 takeover of Twitter, now X, and served on Tesla's board from 2018 to 2022, according to Deadline. That does not make a Paramount cheque likely or close. It explains why Musk is on the call list.
