Key Highlights
- Shares of PSKY jumped approximately 10.7% on April 7 following confirmation of Middle Eastern sovereign wealth fund participation in the Warner Bros. Discovery acquisition.
- Three Gulf state investors—Saudi Arabia’s PIF, Qatar Investment Authority, and Abu Dhabi’s L’imad Holding Co.—have committed roughly $24 billion in total equity.
- Saudi Arabia’s PIF is anticipated to provide around $10 billion of the total commitment; all Gulf investors will receive non-voting Class B shares.
- The acquisition, which carries a total value of up to $111 billion when debt is included, remains subject to WBD shareholder consent and regulatory clearance.
- Voting control through Class A shares remains exclusively with the Ellison family and RedBird Capital, with no anticipated CFIUS or FCC scrutiny.
Shares of Paramount Skydance experienced a significant rally on Tuesday, April 7, following the company’s announcement that three major Gulf state sovereign wealth funds have formally joined as equity syndication partners in its proposed Warner Bros. Discovery takeover.
Paramount Skydance Corporation Class B Common Stock, PSKY
The stock advanced 10.7% to finish the session at $10.88, ranking among the top gainers in the S&P 500 index for the day. Intraday trading saw shares climb even further, showcasing strong investor optimism about the new financial backing.
The trio of Middle Eastern investors—comprising Saudi Arabia’s Public Investment Fund, the Qatar Investment Authority, and Abu Dhabi’s L’imad Holding Co.—are collectively expected to inject approximately $24 billion in equity capital into the deal. The Saudi PIF alone will account for an estimated $10 billion of that commitment.
According to an 8-K regulatory disclosure, these sovereign funds will acquire Class B non-voting shares at prices ranging from $12.00 to $16.02 per share. Investment banking firm LionTree is also participating in the equity syndicate.
Paramount characterized the agreements as “an important milestone in the WBD transaction process,” noting that broadening its investor base and unlocking potential strategic partnerships will strengthen long-term value creation for shareholders.
Middle East Capital Alleviates Financial Burden on Primary Sponsors
The influx of Gulf capital significantly lightens the financial commitment required from the deal’s principal sponsors: RedBird Capital Partners and the Ellison family, led by Oracle founder Larry Ellison—whose son David serves as Paramount’s chief executive.
Paramount had previously raised close to $47 billion in equity that carries “full backing” from the Ellison family and RedBird. The new Gulf state commitments help spread this financial exposure more broadly, although Larry Ellison continues to serve as the ultimate guarantor should any investor withdraw.
Beyond the equity component, Paramount has secured approximately $54 billion in debt financing through Bank of America, Citigroup, and Apollo Global Management. This debt package is currently being distributed to additional lending institutions.
The merger was first unveiled in February. Paramount reached an agreement to acquire Warner Bros. Discovery—the media giant behind HBO, CNN, and the Harry Potter intellectual property—in a deal valued at up to $111 billion when assuming debt obligations. WBD shareholders will receive $31 per share in cash.
Regulatory Hurdles and Expected Timeline
The merger remains contingent upon Warner Bros. Discovery shareholder approval and is currently undergoing regulatory examination in European markets. Company leadership has indicated they’re aiming to complete the transaction as soon as late July 2026.
The participation of Gulf sovereign investors is not anticipated to trigger a review by the Committee on Foreign Investment in the United States (CFIUS), since each fund will hold ownership stakes below the 25% threshold. Federal Communications Commission oversight is also not expected due to the deal’s voting share structure.
Previous iterations of the financing arrangement had included Tencent and Affinity Partners among the investor group, but both entities have since withdrawn from participation.
According to TipRanks analyst coverage, PSKY carries a Moderate Sell consensus rating, with five Hold recommendations and five Sell ratings. The consensus price target stands at $11.38, suggesting potential upside of approximately 4.4% from present trading levels. The stock remains down 18.2% on a year-to-date basis.
