David Zaslav has a simple message for Paramount Skydance chief David Ellison: Get serious or go home.
The hard-charging Warner Bros. Discovery CEO has relayed to Ellison, who reportedly has been floating a lowball bid of around $20 a share and suggesting he might go hostile – that he needs to put up more money, possibly upwards of $30 a share to close a deal, The Post has learned.
Ellison, just months after he purchased Paramount in a deal valued at $8 billion, is expected to finally make an official offer for the company in the coming days as opposed to the soft expressions of interest that have been reported in recent weeks, sources said.
But the 42-year-old son of Larry Ellison – the Trump-backing software tycoon who recently became the world’s second-richest person – is still giving mixed signals about what he’ll offer, according to sources close to the talks.
Specifically, Ellison appears bent on pressing WBD’s board to pressure Zaslav by arguing that his is the only bid in town. Without his buyout interest for the entire company — not just its streaming and studio — Zaslav’s stock will crater, the Ellison camp argues. He likewise claims that antitrust issues will prevent other major media outlets from engaging in a bidding war that amounts to a big gamble, insiders tell The Post.
But Ellison also must tread carefully: Sources say he has been advised by his legal team that a hostile bid is fraught since many top investment houses refrain from strong-arming M&A deals.
Meanwhile, Zaslav – the tough-as-nails dealmaker known as “Zas” in Wall Street and Hollywood – believes he can force Ellison to pay a healthy premium to WBD’s current stock price, currently hovering around $18.
The reason: he is splitting WBD into two separate units, a deal that will go down in May. The planned unit just housing his streaming and studio businesses – the crown jewels of WBD – will have little debt and is being valued at as much $30 by analysts.
More than that, WBD’s board has backed him to play the long game with Ellison, sources say. Zas also believed regulators in the Trump White House might well allow other possible suitors including Comcast, Netflix, Amazon and Apple buy WBD. All are said to be particularly interested in a post-split deal for WBD’s studio that has been cranking out hits and its streaming service, now the industry’s third largest.
And as Zaslav has asked his advisers, if David Ellison is really interested and has the money, why doesn’t he just pay up?
“(Zaslav) doesn’t have to move fast unless Ellison is serious and makes a serious offer which he hasn’t so far,” said one person with direct knowledge of the matter.
A Zas rep had no comment; a spokeswoman for Ellison didn’t return a request for comment.
All of this doesn’t mean Zaslav, a veteran media executive who cut his teeth at NBCU, won’t sell to Ellison. He has told people “every company is for sale at the right price.”
But he needs proof David Ellison has the money for a big deal. Given Paramount Skydance’s thin cash position, it would have to borrow money to pay the premium – as high as $60 billion – that Zas wants. As The Post has reported, Ellison is in talks with private equity firms including Apollo for financing.
David Ellison would probably have to tap into his father’s enormous wealth (approaching $400 billion) to make the numbers work. But some analysts question whether Larry Ellison wants to sell $30 billion in his Oracle stock to finance the deal, noting that he could have done so by now.
One reason people close to the deal talks believe Ellison will move fast is to avert a bidding war for WBD’s assets that will begin as soon as the media company is cleaved into a streamer and studio on one side, and the legacy cable assets on the other.
Bottom line: Ellison is looking to grow his media empire exponentially with WBD. But the deal will cost multiples of what he paid for Paramount, with its middling studio, money-losing streaming service and shrinking legacy assets like CBS.
“Without his father coming in, David has a third-ranked studio and a money losing media property trying to take over something three times its size,” this person said. “If he wants that to happen he will have to pay up.”
