Paramount held talks with Saudi wealth fund over potential Warner Bros Discovery bid

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Paramount’s David Ellison held preliminary talks with Saudi Arabia’s sovereign wealth fund and other major Gulf investors about backing his company’s effort to buy Warner Bros Discovery, people briefed on the matter said.

Ellison, who acquired Paramount this year for $8bn, in recent weeks separately met the kingdom’s Public Investment Fund and other officials from the region after they independently expressed an interest in participating in the bid, the people said.

The talks come as Ellison positions himself to compete for control of one of the industry’s most important libraries, networks and streaming assets at a moment of upheaval for the sector.

Acquiring Warner Bros Discovery — which owns the legendary movie studio, HBO, CNN and franchises from Harry Potter to Batman — would help Paramount compete against larger rivals Netflix and Comcast.

No agreement had been reached with the potential investors, said the people briefed on the talks. But the conversations were described as “active”, underscoring the scale of financing Ellison is seeking to marshal ahead of the opening round of bids.

The most advanced conversations had taken place with Saudi Arabia, the people said. The PIF did not immediately respond to a request for comment. Paramount declined to comment.

Riyadh has been accelerating its push into investing in global entertainment and sports, including recently backing the $55bn buyout of video gaming company Electronic Arts together with Jared Kushner, Donald Trump’s son-in-law, and private equity group Silver Lake.

Those efforts, combined with the kingdom’s deep pockets and close ties with the White House, have made Saudi Arabia a natural choice for Wall Street to sound out as the contest for Warner enters a decisive phase.

Saudi Crown Prince Mohammed bin Salman met the president at the Oval Office on Tuesday to underscore the special relationship between the two leaders.

The president on Tuesday played down concerns about the killing of Saudi journalist Jamal Khashoggi — which the CIA during Trump’s first term concluded the crown prince had approved — and lauded his “friend” Mohammed bin Salman who vowed to invest $1tn in the US.

The renewed interest in Warner has helped lift the company’s stock price in recent weeks. Shares in the company have risen nearly 90 per cent since The Wall Street Journal first reported in early September that Paramount was weighing a move for Warner, sparking speculation that a competitive auction could emerge.

Despite the talks, none of the Gulf investors were expected to be named in Paramount’s nonbinding offer due on Thursday, the people said.

Discussions remain preliminary and it is unclear whether any of the investors will ultimately participate in the transaction.

People involved cautioned that despite the momentum, the process remained complex and negotiations could stretch into early next year.