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Paramount Skydance reportedly secured about $24 billion in funding for its Warner Bros. Discovery takeover from wealth funds in the Middle East.
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Investors have been leery of the deal, with shares down around 50% since it was first reported that Paramount was considering making an offer in September.
Paramount Skydance is about to take the next step in its takeover of Warner Bros. Discovery. Investors haven’t loved the deal so far.
Paramount Skydance (PSKY) has secured around $24 billion in commitments from sovereign wealth funds in Saudi Arabia, Qatar, and the United Arab Emirates to help fund its acquisition of Warner Bros. (WBD), according to a report from The Wall Street Journal over the weekend. The company could not be reached for comment in time for publication.
Shares of Paramount Skydance, which were about 1% higher Monday morning, have lost roughly half their value since last September, when reports first emerged that the company was preparing to make an offer to acquire Warner Bros. Discovery.
Paramount won the monthslong bidding war for Warner Bros. earlier this year, after it upped its offer and Netflix (NFLX) refused to lift its own $72 billion offer Warner Bros. agreed to in December in response.
Shares of companies making an expensive acquisition may be pressured by investors amid uncertainty over the premium the acquiring company has to pay.
None of the three Middle Eastern funds are seen having voting rights in the new company, and Paramount Skydance officials don’t expect the investments would trigger reviews from the federal government, people familiar with the matter told the Journal.
Paramount’s deal will be financed largely by the $24 billion raised from the Middle East and about $54 billion in debt the company has already raised from a number of banks and private equity firms, the Journal reported.
Warner Bros. Discovery shares were little changed in recent trading, while Netflix stock added 1%.
Read the original article on Investopedia