Business
Paramount extends tender offer deadline to woo Warner shareholders as proxy fight heats up
David Ellison is not abandoning his quest to build a new Hollywood juggernaut.
Ellison-controlled Paramount disclosed Thursday in a regulatory filing that it was extending the deadline of its tender offer for Warner Bros. Discovery stock. The firm had previously asked Warner stockholders to sell their shares to Paramount for $30 apiece by Wednesday.
The new deadline is Feb. 20.
Paramount faces an uphill battle in its pursuit of its larger entertainment industry rival. Investors so far have pledged 168.5 million of Warner’s shares to Paramount, according to Thursday’s filing with the Securities and Exchange Commission. Warner, in a statement, said the response represented only about 7% of its investors.
Paramount also filed proxy materials, saying it would challenge an alternative bid by Netflix at an upcoming special meeting of Warner shareholders to vote on the company’s sale. Warner’s board has not yet set the meeting date but has suggested the pivotal vote could occur by April — pushing the pitched battle for the company into spring.
Warner’s board unanimously agreed on Dec. 4 to sell much of the company to Netflix for $27.75 a share. Before that can happen, Warner must spin off CNN and other basic cable channels into a new publicly traded company called Discovery Global.
The multistep process is giving Paramount a wide window to make its case to Warner shareholders.
Warner Bros. Discovery, in a statement, was dismissive of Paramount’s efforts.
“Once again, Paramount continues to make the same offer our Board has repeatedly and unanimously rejected in favor of a superior merger agreement with Netflix,” Warner Bros. Discovery said in a statement. “It’s also clear our shareholders agree, with more than 93% also rejecting Paramount’s inferior scheme. We are confident in our ability to achieve regulatory approval for the Netflix merger.”
Paramount has sued Warner Bros. and its chief executive, David Zaslav, in a Delaware court, but the judge turned down Paramount’s request to expedite the legal proceedings to help Paramount make its case to Warner shareholders.
Paramount hopes that, over time, the proxy battle will be more fruitful. It plans to ask Warner shareholders to vote against the Netflix deal at the special meeting. Paramount has also said it would put forth its own slate of directors to be elected during Warner’s annual meeting with shareholders.
“The consideration payable to WBD shareholders in the Netflix transaction falls well short of Paramount’s $30 per share all-cash offer,” Paramount said in Thursday’s announcement.
Billionaire Larry Ellison and his family took control of Paramount in August, determined to become major players in Hollywood.
The following month, the Ellisons began an audacious pursuit of Warner Bros. Discovery. Their goal is to combine two century-old film studios and vibrant television production capabilities and marry such popular TV networks as HBO, CBS, Comedy Central, HGTV and TBS.
Netflix was the surprise suitor after Warner opened the auction to other bidders in late October.
Paramount launched its hostile takeover last month after failing to gain traction with Warner’s board, which remains steadfast in its support for Netflix’s $72-billion proposed purchase of HBO, HBO Max, television production and the Warner Bros. film studio, which led the Hollywood pack in the prestigious Oscar nominations, which were announced Thursday.
Earlier this week, Netflix converted its $27.75-a-share bid to an all-cash offer in hopes of defusing some of Paramount’s criticisms of its deal.
Paramount, which enjoys support from President Trump, has been stressing that Netflix’s regulatory path is uncertain.
Both sides plan to make their case to U.S. and European regulators.
Unlike Netflix, Paramount wants to buy all of Warner Bros. Discovery, including CNN and other basic cable channels. The value of the proposed cable channel company, Discovery Global, factors into the ultimate value that shareholders would receive if the Netflix bid prevails.
Warner’s cable channel spin-off is expected to be completed this summer. The value of the channels is in doubt, giving Paramount ammunition to claim that its $30-a-share tender offer for the entire company was more lucrative than Netflix’s offer for Warner’s studios and HBO.
Business
Ex-Google engineer convicted of stealing AI trade secrets to benefit China
A former software engineer at Google has been convicted of stealing artificial intelligence trade secrets for the benefit of China, the U.S. Department of Justice said.
A federal jury on Thursday convicted Linwei Ding, 38, of seven counts of economic espionage and seven counts of theft of trade secrets after an 11-day trial in the U.S. District Court in the Northern District of California.
The verdict marked the Justice Department’s first conviction on AI-related economic espionage charges, according to a statement from Roman Rozhavsky, assistant director of the FBI’s counterintelligence and espionage division.
Ding’s attorney did not respond to an email seeking comment Friday.
Ding stole more than 2,000 pages of confidential information containing Google’s AI trade secrets from the company’s network and uploaded them to his personal Google cloud account between May 2022 and April 2023, according to evidence presented at trial.
At the same time, he secretly worked with two Beijing-based technology companies, staging discussions with one early-stage company to be its chief technology officer, and later acting as founder and chief executive of a second startup, prosecutors said. He told potential investors that he could build an AI supercomputer by copying Google’s technology, court documents state.
Ding downloaded the trade secrets to his personal computer less than two weeks before he resigned from Google in December 2023, prosecutors said. He also applied for what prosecutors described as a Chinese government-sponsored “talent plan” intended to attract people to contribute to the country’s economic and technological growth.
His application stated that he planned to “help China to have computing power infrastructure capabilities that are on par with the international level,” prosecutors said.
“This conviction reinforces the FBI’s steadfast commitment to protecting American innovation and national security,” FBI Special Agent in Charge Sanjay Virmani said in a statement.
“The theft and misuse of advanced artificial intelligence technology” to benefit China, Virmani added, “threatens our technological edge and economic competitiveness.”
Ding faces a maximum possible sentence of 10 years in prison for each count of theft of trade secrets and 15 years in prison for each count of economic espionage. He’s next due in court Tuesday for a status conference.
“We’re grateful to the jury for making sure justice was served today, sending a clear message that stealing trade secrets has serious consequences.” Lee-Anne Mulholland, vice president of regulatory affairs for Google, said in a statement.
Business
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Business
Dream of owning a flying car? This California company is already selling them
A future with flying cars is no longer science fiction — all you need to order your own is about $200,000 and some hope and patience.
The Palo Alto-based company Pivotal has been developing the technology since 2009 and is nearly ready to bring it to market. The company’s founder Marcus Leng was the first to fly in its real-life version of a flying car in 2011.
Leng engineered an ultralight, electric-powered vertical takeoff and landing aircraft known as an eVTOL. Other VTOL aircraft, such as helicopters, had existed for decades, but Leng’s invention was fixed-wing and didn’t rely on gas.
The Canadian engineer dubbed his creation BlackFly and spent years working on it in secret.
The company moved to the Bay Area in 2014 and by 2018 had developed a second version of BlackFly that laid the groundwork for Helix, the aircraft Pivotal now offers for sale.
Pilot Aeddon Chipman readies the Pivotal BlackFly in Watsonville, Calif.
“The company kind of came out of stealth at that point and said, ‘This is what we’re up to,’ ” said Pivotal Chief Executive Ken Karklin, who took over company leadership from Leng in 2022.
Those who are curious — and wealthy — can reserve a Helix today with a $50,000 deposit. The aircraft starts at $190,000 with the option of purchasing a transport trailer for $21,000 and a charger for $1,100.
A customer who makes their reservation today could receive their aircraft in nine to 12 months, Karklin said. It takes less than two weeks to learn how to fly it.
In order to complete Pivotal’s flight certification training, a customer has to pass the FAA knowledge test and complete ground school. Training, which takes place at the company’s Palo Alto headquarters and at the Monterey Bay Academy Airport, teaches customers how to control and maintain the aircraft, as well as how to transport and assemble it.
Pivotal, formerly known as Opener, publicly introduced the BlackFly in July 2018. In October 2023, the company unveiled Helix, calling it the first scalable aircraft of its kind.
The Pivotal Black Fly takes off near Watsonville, Calif.
A handful of California companies are using eVTOL technology to develop what they call air taxis to shuttle people around congested cities. But Pivotal says it offers something different: a single-person aircraft for recreational use and short-haul travel that also has the potential to support emergency response and military operations.
It is uncertain how fast the company and others like it can ramp up production and how communities will react. Not everyone is on board. Darlene Yaplee, president of the Aviation-Impacted Communities Alliance, said there are concerns about having different types of aircraft in limited airspace.
Pivotal has around six early-access customers who already own a version of the BlackFly and are flying it for fun. The aircraft is designed to be accessible and user-friendly, and you don’t need a pilot’s license to operate it.
Tim Lum, a Washington state resident, bought his BlackFly in 2023. He’s since taken it on around 1,200 flights in 100 different locations across the U.S.
The Pivotal BlackFly cruises in the air.
Lum, who isn’t an FAA-certified pilot, said owning a BlackFly is like a dream. He can take off and land anywhere with 100 feet of clearance and permission if on private land. He also uses small, private airports.
The aircraft is stored in Twisp, Wash., but Lum has towed it coast to coast, stopping to fly in states such as Florida, Montana and California. He shares it with family and friends who also trained to get certified by the company.
“Something really happens to the synapses in my brain when I’m flying,” Lum said. “Things get sorted out and things make sense. This has opened up more doors for me and the people that I care about than money can buy.”
Pilot Aeddon Chipman launches the Pivotal BlackFly.
The Helix is classified as a Part 103 ultralight aircraft, the same regulatory class as a hang glider. It’s meant to be flown less than 200 feet high, in unregulated airspace, and weighs about 355 pounds empty.
Karklin said the company has received about a year’s worth of reservations for Helix. He did not specify the number of customers but said it was more than 10.
Karklin has been getting Pivotal ready for a wider market. The company, which has more than 100 full-time employees, has trained just over 50 people to fly its aircraft. Customers and employees have been trained.
Pivotal’s business will operate across three segments, Karklin said, including personal use, public safety and defense.
“You’re going to see business generated by all three,” he said. “We talk about recreation and short hop travel, and sometimes folks can be a little dismissive about that. I think that’s a huge mistake.”
The Pivotal BlackFly in flight.
In 2023, Pivotal leased eight aircraft to an innovation arm of the U.S. Air Force and defense technology firm MTSI. The Air Force conducted nondevelopmental testing and evaluation of the vehicle that informed the latest version of Helix.
Helix will have an electric range of about 30 minutes and a cruise speed of 62 mph, the company said. It takes 75 minutes to charge it using a 240 volt charger.
The noise produced by the aircraft during takeoff and landing is equivalent to a couple of leaf blowers, Karklin said. When flying it is overhead, someone on the ground might not be able to hear it.
Karklin said the simplicity of the aircraft comes with lower cost, lower weight and higher safety. The aircraft, which has only 18 moving parts, is full of redundancy to prevent system failures.
It’s been independently evaluated by the Light Aircraft Manufacturers Assn., and Pivotal’s quality management system has received a certification from SAE International, which sets aviation safety standards.
The company completes flight demonstrations frequently at the Monterey Bay Academy Airport, near the coast in Watsonville.
When Helix flies, it turns heads, Karklin said.
“It’s starting to get very real,” he said. “More people can actually see it in person and touch it and feel it. And then they want to get on.”
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