Paramount Skydance (PSKY) Stock Jumps 8% on $47B Financing Package and Middle East Backing

TLDR

• PSKY jumped nearly 8% after revealing a massive equity financing package tied to its Warner Bros. Discovery acquisition
• Up to $46.97B in PIPE financing was lined up, led by Larry Ellison’s trust and RedBird Capital
• Middle East sovereign wealth funds — Saudi Arabia’s PIF, Abu Dhabi’s L’Imad, and Qatar’s QIA — confirmed as equity backers
• Paramount amended its charter to expand Class B authorized shares from 5.5B to 7B and issued 10-year warrants to existing holders
• The WBD merger is priced at $31 per share and is expected to close by end of Q3 2026

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Paramount Skydance filed an 8-K with the SEC on Tuesday, confirming a sweeping set of corporate actions tied to its planned acquisition of Warner Bros. Discovery (WBD).

Paramount Skydance Corporation Class B Common Stock, PSKY

The filing revealed that the company has secured up to $46.97 billion in PIPE financing. Leading that effort are affiliates of Larry Ellison’s Lawrence J. Ellison Revocable Trust and RedBird Capital Partners.

Middle East sovereign wealth funds are also in the mix. Saudi Arabia’s Public Investment Fund, Abu Dhabi’s L’Imad 1st SPV 2 Exempt RSC, and Qatar’s QIA TMT Holding LLC were confirmed as equity participants. LionTree Investment Fund is also named as a new stakeholder in the deal.

The company amended its certificate of incorporation to raise the number of authorized Class B Common shares from 5.5 billion to 7 billion. The amendment also allows the board to declare dividends to Class B holders without requiring a matching dividend to Class A holders, subject to Class A shareholder approval.

These investors will receive newly issued non-voting Class B shares, priced between $12.00 and $16.02 per share — based on the 20-day average trading price prior to closing.

A previously planned rights offering at $16.02 per share has been scrapped. The equity syndication plan replaces it.

Warrant Distribution

Each Class B shareholder — excluding the new equity investors — will receive one warrant per share held. Each warrant lets the holder buy one additional Class B share at the same subscription price range, with anti-dilution protections built in.

The warrants run for 10 years and Paramount plans to list them on Nasdaq, pending approvals.

The Ellison Guarantee — Larry Ellison’s personal backstop commitment for his son David’s deal — remains “in full force and effect,” according to the filing. That guarantee was put in place to cover the WBD acquisition if other equity commitments fell through.

The $111 billion offer for WBD was deemed superior to a prior Netflix bid, which had been structured around buying only the “Warner Bros.” pieces following a planned split. David Ellison pushed through with a bid for the entire company.

The merger is priced at $31 per share in cash — a steep premium to WBD’s current price of $9.85, which has fallen 46% over the past six months.

Paramount Skydance’s own stock is down 26.11% year-to-date, with a market cap of around $10.95 billion.

Analyst Reactions

Guggenheim raised its price target for PSKY to $14, keeping a Neutral rating, after a post-announcement conference call. Wolfe Research kept its Underperform rating with a $10 target, flagging potential equity raises between $13B and $25B to fund growth.

MoffettNathanson downgraded WBD from Buy to Neutral at a $31 target following the merger announcement.

The deal is expected to generate $69 billion in pro forma revenue for fiscal 2026, $18 billion in adjusted EBITDA, and $6 billion in synergies. It is slated to close by end of Q3 2026.

Paramount also paid Netflix a $2.8 billion breakup fee after Netflix abandoned its earlier plan to buy parts of WBD.

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