Paramount’s $52 billion debt financing for the Warner Bros. Discovery Inc. takeover by David Ellison’s Paramount Skydance Corp. concluded with immediate losses for investors. The company sold $52 billion of loans and bonds in a week, funding the $110 billion buyout by Oct. 6.
However, higher interest costs, estimated at $250 million to $500 million annually, strained the merged business. Paramount’s shares fell nearly 10% on Thursday. CFO Dennis Cinelli called it a “strategic, long-term investment,” comparing it to Uber’s rocky IPO.
The deal involved Bank of America Corp. and Citigroup Inc., with Apollo Global Management Inc. providing a $57.5 billion bridge loan. Lawsuits delayed the merger, and a surge in bond yields added costs. Investors faced paper losses as debt traded weakly.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing