David Ellison Photo by Anna Moneymaker/Getty Images There might be a war in the Middle East that threatens to wreak havoc on the global economy, but sovereign wealth funds controlled by Saudi Arabia, Qatar and Abu Dhabi are willing to bet on an American media company.
Paramount, led by David Ellison, is closing in on a deal with Saudi Arabia’s Public Investment Fund, Qatar Investment Authority and Abu Dhabi’s L’imad Holding Co. to provide $24 billion in equity backing for his $111 billion takeover of Warner Bros. Discovery, according to The Wall Street Journal. $10 billion of that $24 billion will come from the PIF.
The capital will help offset the costs for the Oracle founder Larry Ellison and RedBird Capital Partners, which have agreed to backstop David Ellison’s deal. The foreign investors are not expected to hold any governance or board seats.
Paramount disclosed the foreign backers when it launched its hostile bid for Warners last year. The Chinese firm Tencent and Jared Kushner’s Affinity Partners were also involved at various points, though neither are said to be buying into the new deal. Still, there is room to syndicate more equity, and Paramount says it plans to raise new equity as part of the transaction. It is not clear if Paramount will formally disclose all of the equity partners.
But the Middle East funds have also raised concerns from Democratic lawmakers, who are urging a review by the FCC or CFIUS, despite the lack of governance or operational authority from the funds.
Middle East sovereign wealth funds have been aggressively investing in American media assets, with the PIF also backing the take-private of video game giant Electronic Arts, as well as many other smaller-scale investments in the space.
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