Ellison added 67 million shares of Oracle (ORCL.US) shares as loan collateral to help Paramount Tianmu (PSKY.US)'s $100 billion Warner acquisition

Zhitong Finance App learned that, according to the power of attorney documents submitted last Friday, as one of the key players driving Paramount Tianmu (PSKY.US)'s acquisition of Warner BD.US (WBD.US) deal, ORCL.US (ORCL.US) Executive Chairman and Chief Technology Officer Lawrence Ellison (Lawrence Ellison)'s current Oracle shares used as collateral for personal loans increased by 67 million shares compared to a year ago, an increase of 19%.

Based on Oracle's closing price of $137.10 last Friday, the Oracle shares currently pledged by Ellison are worth about $9.2 billion, accounting for about 36% of the total Oracle shares it holds. Oracle generally prohibits company executives and directors from using company shares as collateral for personal loans, but Ellison is the only exception approved.

This increase in stock collateral comes at a time when Ellison is participating in funding the Paramount Tianwu deal to acquire Warner Bros. Exploration. Paramount Tianwu plans to buy Warner Bros. Exploration for $111 billion, and the Ellison family promised to provide $47 billion in equity capital for the deal. Of this, about $24 billion will come from three Middle Eastern sovereign wealth funds. Additionally, Paramount Tianmu is also seeking debt financing.

It's worth mentioning that Paramount Sky Dance, led by David Ellison (David Ellison), the son of Ellison, is one step closer to completing the acquisition of Warner Bros. Discovery recently. Last week Paramount reached a settlement with 12 state attorneys general and the American Screenwriters Union over previous lawsuits aimed at blocking the deal. As related lawsuits are resolved, Paramount Tianwu is gradually getting closer to finalizing the acquisition deal for Warner Bros. Exploration.

One of the core elements of this settlement is Paramount Tianwu's previous commitment to distribute movies in theaters. According to people familiar with the matter, the relevant provisions require the merged company to distribute 30 movies in cinemas every year. If Paramount Sky Dance fails to meet this goal, it may be necessary to pay a $30 million fine for every fewer movie released. The negotiations also discussed stricter restrictions: if Paramount Tianmu fails to meet the established theatrical distribution target, the company may even be required to sell its shares in the film production company Miramax.

In addition to film production and distribution, the independence of news editors from CBS and CNN was also one of the focuses of attention in this negotiation. According to people familiar with the matter, the final plan includes arrangements to set up independent editorial boards for CBS and CNN. The previous negotiation plan also involved independent monitoring of CNN's content.

Paramount Tianwu is the parent company of media assets such as CBS and MTV, while Warner Bros. Discovery owns important assets such as CNN, HBO, and Warner Bros. Film Studios. Once the deal is completed, the two companies' extensive film, TV, streaming and cable assets will be consolidated under the same group. Therefore, in addition to traditional anti-monopoly issues, news business governance and editorial independence after the merger have also become important topics in the transaction review process.

However, the delay brought about by the lawsuit is putting tremendous financial pressure on Paramount Sky Dance. According to the terms of the deal, if the merger is not completed by September 30, 2026, Paramount Tianwu will be required to pay “ticking fees” (ticking fees) of $7 million per day to Warner Bros. Exploration shareholders. Paramount Tianwu has filed a request in court for $1.88 billion in security deposits from the 12 states filing the lawsuit to cover the cost of transaction delays caused by the lawsuit. The company pointed out that by the end of the trial in March next year and the final legal statement was submitted, it had already paid $1.3 billion in irrecoverable “time costs” to Warner Bros. Exploring shareholders.

In addition, the documents submitted by Oracle this time also disclosed the stock option rewards situation of the company's management. Together, Oracle's two co-CEOs received $870 million worth of stock option rewards. Among them, Clayton Magouyrk received rewards worth 621.7 million US dollars, and Michael Sicilia received rewards worth 248.7 million US dollars. The two executives took over as co-CEOs last year, after Safra Catz, a senior Oracle executive. Lawrence Ellison did not receive equity rewards for two consecutive fiscal years before, but this time he received a stock option reward worth US$117.8 million.