According to Paramount Skydance, 49.5% of the combined Paramount and Warner Bros. Discovery will be owned by foreign investors, and about 38.5% of the new company will be held by three Middle Eastern funds.
Paramount said in an FCC filing on Monday that Saudi Arabia’s Public Investment Fund will hold a 15.1% stake. The UAE sovereign wealth fund holds 12.8% of the shares. Qatar Investment Authority will own 10.6% of the shares. Paramount has previously said that foreign investors supporting the WBD acquisition will have no board seats or voting rights.
According to Paramount’s filing, the Ellison family (David Ellison and his father Larry Ellison), along with Redbird Capital Partners, will continue to hold the largest stake in Paramount Skydance Warner Bros. Discovery and will retain control with 100% voting power.
In total, Middle East funds will own 38.5% of Paramount-WBD’s shares, with the remaining foreign ownership representing existing investors in Paramount Skydance and/or Redbird. In its FCC filing, Paramount is seeking “prior approval for each entity seeking specific approval to increase its stake and/or voting rights in Paramount by up to 20% at some point in the future.”
Paramount Skydance has asked three Middle East sovereign wealth funds to invest nearly $24 billion in the WBD deal. Saudi Arabia’s PIF will acquire approximately $10 billion in equity.
Last week, Warner Bros. Discovery shareholders overwhelmingly voted in favor of an $111 billion sale to Paramount. The deal still requires approval from European regulators, but state attorneys general may move to mount a legal challenge to Paramount’s deal with WBD. Paramount said it had proposed that the WBD acquisition had cleared the Department of Justice’s milestones even before acquiring the WBD acquisition, which came after the expiration of the statutory waiting period associated with Paramount’s “certification of compliance” with the Department of Justice’s second request for information under the Hart-Scott-Rodino Antitrust Act. However, the Department of Justice has the freedom to object to the merger even after the HSR waiting period ends.
Paramount’s Monday FCC filing seeks a “declaratory ruling” to allow foreign ownership in Paramount and WBD entities (available at this link). However, a Paramount spokesperson said the FCC’s approval of Paramount Warner Bros.’s foreign ownership is not a condition of closing the deal.
Specifically, Paramount requested the FCC to “(1) permit existing and prospective foreign investors to indirectly own Paramount stock and voting rights in excess of a statutory benchmark of 25% in the aggregate; It seeks a declaratory ruling specifically authorizing investors to indirectly hold shares and/or deemed voting rights in Paramount; and (3) providing prior approval for non-controlling prospective foreign investors to increase their indirect holdings. Holds up to 20% of Paramount’s stock and/or voting rights. ”
In a statement to Variety, a representative for Paramount Skydance said, “Paramount has filed a customary motion with the FCC seeking a declaratory ruling regarding Paramount’s indirect foreign investment in its broadcast television stations as a result of a recent stock syndication. Filings to the FCC are entirely standard for such investments and are subject to change by Paramount. It is not a condition to closing the WBD acquisition. Upon completion of the transaction and the stock syndication, the Ellison family and the Red Birds will together hold the largest share of the combined company and will remain the sole owners of Class A common stock representing 100% of the voting stock, and the other stock syndication parties will have no governance rights, voting stock or board representation.”
A Paramount representative added, “The combination of Paramount and WBD’s complementary assets will create a strong champion for creative talent and consumer choice while enhancing competition.”
