Politics
Warner Bros. rejects Paramount’s hostile bid, accuses Ellison family of failing to put money into the deal
Warner Bros. Discovery has sharply rejected Paramount’s hostile offer, alleging the $108-billion deal carries substantial risks because the Larry Ellison family has failed to put real money behind its bid for Warner’s legendary movie studio, HBO and CNN.
Paramount “has consistently misled WBD shareholders that its proposed transaction has a ‘full backstop’ from the Ellison family,” Warner Bros. Discovery’s board wrote Wednesday in a letter to its shareholders filed with the Securities & Exchange Commission.
“It does not, and never has,” the Warner board said.
Warner’s board voted unanimously that Paramount’s hostile bid “was not in the best interests” of its shareholders.
For Warner, what was missing was a clear declaration from Paramount that the Ellison family had agreed to commit funding for the deal. Paramount last week told Warner stockholders that it would pay them $30 a share — or $78 billion for the entire company. Paramount also has said it would absorb Warner’s debt, making the overall deal worth $108-billion.
A Paramount representative was not immediately available for comment Wednesday.
The Warner auction has taken several nasty turns. Last week, Paramount launched its hostile takeover campaign for Warner after losing the bidding war to Netflix. Warner board members on Dec. 4 had unanimously approved Netflix’s $82.7-billion deal for the Warner Bros. film and television studios, HBO and HBO Max.
In its letter, the Warner board reaffirmed its support for Netflix’s $27.75 a share proposal, saying it represented the best deal for shareholders. Warner board members urged investors not to tender their shares to Paramount.
Board members said they were concerned that Paramount’s financing appeared shaky and the Ellison family’s assurances were far from ironclad. Instead Paramount’s proposal contained “gaps, loopholes and limitations,” Warner said, including troubling caveats, such as saying in documents that Paramount “reserve[d] the right to amend the offer in any respect.”
The Warner board argued that its shareholders could be left holding the bag.
Paramount Chief Executive David Ellison has argued his $78-billion deal is superior to Netflix’s proposal.
(Evan Agostini / Evan Agostini/invision/ap)
Paramount Chairman David Ellison has championed Paramount’s strength in recent weeks saying his company’s bid for all of Warner Bros. Discovery, which includes HBO, CNN and the Warner Bros. film and television studios, was backed by his wealthy family, headed by his father, Oracle co-founder Larry Ellison, one of the world’s richest men.
Ellison sent a letter last week to Warner shareholders, asking for their support. The tech scion wrote his family and RedBird Capital Partners would be strong stewards of Warner’s iconic properties, which include Batman, Harry Potter, Scooby-Doo, “The Lord of the Rings,” and HBO’s “Game of Thrones.”
Ellison wrote that Paramount delivered “an equity commitment from the Ellison family trust, which contains over $250 billion of assets,” including more than 1 billion Oracle shares.
In regulatory filings, Paramount has disclosed that, for the equity portion of the deal, it planned to rely on $24 billion from sovereign wealth funds representing the royal families of Saudi Arabia, Qatar and Abu Dhabi as well as $11.8 billion from the Ellison family (which also holds the controlling shares in Paramount).
This week, President Trump’s son-in-law Jared Kushner’s Affinity Partners private equity firm pulled out of Paramount’s financing team.
Paramount’s bid would also need more than $60 billion in debt financing.
Paramount has made six offers for Warner Bros., and its “most recent proposal includes a $40.65 billion equity commitment, for which there is no Ellison family commitment of any kind,” the Warner board wrote.
“Instead, they propose that [shareholders] rely on an unknown and opaque revocable trust for the certainty of this crucial deal funding,” the board said, noting that a revocable trust could always be changed. “A revocable trust is no replacement for a secured commitment by a controlling stockholder,” the board’s letter said.
Throughout the negotiations, Paramount, which trades under the PSKY ticker, failed to present a solid financing commitment from Larry Ellison — despite Warner’s bankers telling them that one was necessary, the board said.
“Despite … their own ample resources, as well as multiple assurances by PSKY during our strategic review process that such a commitment was forthcoming – the Ellison family has chosen not to backstop the PSKY offer,” Warner’s board wrote.
David Ellison has insisted Paramount’s offer of $30 a share was superior to Netflix’s winning bid.
Paramount wants to buy all of Warner Bros. Discovery, while Netflix has made a deal to take Warner’s studios, its spacious lot in Burbank, HBO and HBO Max streaming service.
Warner plans to spin off its linear cable channels, including CNN, HGTV, Cartoon Network and TBS, early next year.
Paramount’s lawyers have argued that Warner tipped the auction to favor Netflix.
Paramount, which until recently enjoyed warm relations with President Trump, has long argued that its deal represents a more certain path to gain regulatory approvals. Trump’s Department of Justice would consider any anti-trust ramifications of the deal, and in the past, Trump has spoken highly of the Ellisons.
However, Warner’s board argued that Paramount might be providing too rosy a view.
“Despite PSKY’s media statements to the contrary, the Board does not believe there is a material difference in regulatory risk between the PSKY offer and the Netflix merger,” the Warner board wrote. “The Board carefully considered the federal, state, and international regulatory risks for both the Netflix merger and the PSKY offer with its regulatory advisors.”
The board noted that Netflix agreed to pay a record $5.8 billion if its deal fails to clear the regulatory hurdles.
Paramount has offered a $5 billion termination fee.
Should Warner abandon the transaction with Netflix, it would owe Netflix a $2.8 billion break-up fee.
Warner also pointed to Paramount’s promises to Wall Street that it would shave $9 billion in costs from the combined companies. Paramount is in the process of making $3 billion in cuts since the Ellison family and RedBird Capital Partners took the helm of the company in August.
Paramount has promised another $6 billion in cuts should it win Warner Bros.
“These targets are both ambitious from an operational perspective and would make Hollywood weaker, not stronger,” the Warner board wrote.
Politics
Trump ally diGenova tapped to lead DOJ probe into Brennan over Russia probe origins
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The Justice Department is turning to former Trump attorney Joeseph diGenova to spearhead a probe into ex-CIA Director John Brennan and others over the origins of the Trump-Russia investigation, as the department reshuffles leadership of the sprawling inquiry.
Acting Attorney General Todd Blanche has tapped diGenova to serve as counsel overseeing the matter, according to a New York Times report, putting a former Trump attorney in a key role in the high-profile probe. A federal grand jury seated in Miami has been impaneled since late last year.
The Department of Justice did not immediately respond to Fox News Digital’s request for comment.
DOJ ACTIVELY PREPARING TO ISSUE GRAND JURY SUBPOENAS RELATING TO JOHN BRENNAN INVESTIGATION: SOURCES
Joseph diGenova represented President Donald Trump during special counsel Robert Mueller’s investigation. (Tom Williams/CQ-Roll Call/Getty Images)
DiGenova, a former U.S. attorney in Washington, D.C., who represented Trump during special counsel Robert Mueller’s investigation, has repeatedly accused Brennan of misconduct tied to the origins of the Russia probe—allegations that have not resulted in criminal charges.
He also said in a 2018 appearance on Fox News that Brennan colluded with the FBI and DOJ to frame Trump.
The origins of the Russia investigation have been the subject of ongoing scrutiny by Trump allies, who have argued that intelligence and law enforcement officials improperly launched the probe.
BRENNAN INDICTMENT COULD COME WITHIN ‘WEEKS’ AS PROSECUTORS REQUEST OFFICIAL TRANSCRIPTS
Joseph diGenova has previously said that ex-CIA chief John Brennan colluded with the FBI and DOJ to frame Trump. (Tom Williams/CQ-Roll Call/Getty Images)
DiGenova’s appointment follows the ouster of Maria Medetis Long, a national security prosecutor in the South Florida U.S. attorney’s office. She had been overseeing the inquiry, including a false statements probe related to Brennan and broader conspiracy-related investigations.
As the investigation continues, federal investigators have issued subpoenas seeking information related to intelligence assessments of Russian interference in the 2016 election.
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John Brennan has denied any wrongdoing related to the Russia investigation. (William B. Plowman/NBC/NBC NewsWire via Getty Images; Alex Wong/Getty Images)
Brennan has previously denied wrongdoing related to the Russia investigation and has defended the intelligence community’s assessment that Moscow interfered in the 2016 election.
Politics
Supreme Court weighs phone searches to find criminals amid complaints of ‘digital dragnets’
WASHINGTON — A man carrying a gun and a cellphone entered a federal credit union in a small town in central Virginia in May 2019 and demanded cash.
He left with $195,000 in a bag and no clue to his identity. But his smartphone was keeping track of him.
What happened next could yield a landmark ruling from the Supreme Court on the 4th Amendment and its restrictions against “unreasonable searches.” The court will hear arguments on the issue on April 27.
Typically, police use tips or leads to find suspects, then seek a search warrant from a judge to enter a house or other private area to seize the evidence that can prove a crime.
Civil libertarians say the new “digital dragnets” work in reverse.
“It’s grab the data and search first. Suspicion later. That’s opposite of how our system has worked, and it’s really dangerous,” said Jake Laperruque, an attorney for the Center for Democracy & Technology.
But these new data scans can be effective in finding criminals.
Lacking leads in the Virginia bank robbery, a police detective turned to what one judge in the case called a “groundbreaking investigative tool … enabling the relentless collection of eerily precise location data.”
Cellphones can be tracked through towers, and Google stored this location history data for hundreds of millions of users. The detective sent Google a demand for information known as a “geofence warrant,” referring to a virtual fence around a particular geographic area at a specific time.
The officer sought phones that were within 150 yards of the bank during the hour of the robbery. He used that data to locate Okello Chatrie, then obtained a search warrant of his home where the cash and the holdup notes were found.
Chatrie entered a conditional guilty plea, but the Supreme Court will hear his appeal next week.
The justices agreed to decide whether geofence warrants violate the 4th Amendment.
The outcome may go beyond location tracking. At issue more broadly is the legal status of the vast amount of privately stored data that can be easily scanned.
This may include words or phrases found in Google searches or in emails. For example, investigators may want to know who searched for a particular address in the weeks before an arson or a murder took place there or who searched for information on making a particular type of bomb.
Judges are deeply divided on how this fits with the 4th Amendment.
Two years ago, the conservative U.S. Court of Appeals for the 5th Circuit in New Orleans ruled “geofence warrants are general warrants categorically prohibited by the 4th Amendment.”
Chief Justice John Roberts sided with the court’s liberals in a 4th Amendment privacy case in 2018.
(Alex Wong / Getty Images)
Historians of the 4th Amendment say the constitutional ban on “unreasonable searches and seizures” arose from the anger in the American colonies over British officers using general warrants to search homes and stores even when they had no reason to suspect any particular person of wrongdoing.
The National Assn. of Criminal Defense Lawyers relies on that contention in opposing geofence warrants.
Its lawyers argued the government obtained Chatrie’s “private location information … with an unconstitutional general warrant that compelled Google to conduct a fishing expedition through millions of Google accounts, without any basis for believing that any one of them would contain incriminating evidence.”
Meanwhile, the more liberal 4th Circuit in Virginia divided 7-7 to reject Chatrie’s appeal. Several judges explained the law was not clear, and the police officer had done nothing wrong.
“There was no search here,” Judge J. Harvie Wilkinson wrote in a concurring opinion that defended the use of this tracking data.
He pointed to Supreme Court rulings in the 1970s declaring that check records held by a bank or dialing records held by a phone company were not private and could be searched by investigators without a warrant.
Chatrie had agreed to having his location records held by Google. If financial records for several months are not private, the judge wrote, “surely this request for a two-hour snapshot of one’s public movements” is not private either.
Google changed its policy in 2023 and no longer stores location history data for all of its users. But cellphone carriers continue to receive warrants that seek tracking data.
Wilkinson, a prominent conservative from the Reagan era, also argued it would be a mistake for the courts to “frustrate law enforcement’s ability to keep pace with tech-savvy criminals” or cause “more cold cases to go unsolved. Think of a murder where the culprit leaves behind his encrypted phone and nothing else. No fingerprints, no witnesses, no murder weapon. But because the killer allowed Google to track his location, a geofence warrant can crack the case,” he wrote.
Judges in Los Angeles upheld the use of a geofence warrant to find and convict two men for a robbery and murder in a bank parking lot in Paramount.
The victim, Adbadalla Thabet, collected cash from gas stations in Downey, Bellflower, Compton and Lynwood early in the morning before driving to the bank.
After he was robbed and shot, a Los Angeles County sheriff’s detective found video surveillance that showed he had been followed by two cars whose license plates could not be seen.
The detective then sought a geofence warrant from a Superior Court judge that asked Google for location data for six designated spots on the morning of the murder.
That led to the identification of Daniel Meza and Walter Meneses, who pleaded guilty to the crimes. A California Court of Appeal rejected their 4th Amendment claim in 2023, even though the judges said they had legal doubts about the “novelty of the particular surveillance technique at issue.”
The Supreme Court has also been split on how to apply the 4th Amendment to new types of surveillance.
By a 5-4 vote, the court in 2018 ruled the FBI should have obtained a search warrant before it required a cellphone company to turn over 127 days of records for Timothy Carpenter, a suspect in a series of store robberies in Michigan.
The data confirmed Carpenter was nearby when four of the stores were robbed.
Chief Justice John G. Roberts, joined by four liberal justices, said this lengthy surveillance violated privacy rights protected by the 4th Amendment.
The “seismic shifts in technology” could permit total surveillance of the public, Roberts wrote, and “we decline to grant the state unrestricted access” to these databases.
But he described the Carpenter decision as “narrow” because it turned on the many weeks of surveillance data.
In dissent, four conservatives questioned how tracking someone’s driving violates their privacy. Surveillance cameras and license plate readers are commonly used by investigators and have rarely been challenged.
Solicitor Gen. D. John Sauer relies on that argument in his defense of Chatrie’s conviction. “An individual has no reasonable expectation of privacy in movements that anyone could see,” he wrote.
The justices will issue a decision by the end of June.
Politics
Trump renews bridge, power plant threat against Iran in push for deal, mocks ‘tough guy’ IRGC
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President Donald Trump mocked the Islamic Revolutionary Guard on Sunday morning for staking claim to a Strait of Hormuz “blockade” the U.S. military had already put in place.
“Iran recently announced that they were closing the Strait, which is strange, because our BLOCKADE has already closed it,” Trump wrote on Truth Social. “They’re helping us without knowing, and they are the ones that lose with the closed passage, $500 Million Dollars a day! The United States loses nothing.
“In fact, many Ships are headed, right now, to the U.S., Texas, Louisiana, and Alaska, to load up, compliments of the IRGC, always wanting to be ‘the tough guy!’”
Trump declared Saturday’s IRGC fire was “a total violation” of the ceasefire.
“Iran decided to fire bullets yesterday in the Strait of Hormuz — A Total Violation of our Ceasefire Agreement!” his post began.
“Many of them were aimed at a French Ship, and a Freighter from the United Kingdom. That wasn’t nice, was it? My Representatives are going to Islamabad, Pakistan — They will be there tomorrow evening, for Negotiations.”
Trump remains hopeful about diplomacy, but is not ruling out a return to force, where he once warned about ending “civilation” in Iran as they know it.
“We’re offering a very fair and reasonable DEAL, and I hope they take it because, if they don’t, the United States is going to knock out every single Power Plant, and every single Bridge, in Iran,” Trump’s stern warning continued.
“NO MORE MR. NICE GUY!
“They’ll come down fast, they’ll come down easy and, if they don’t take the DEAL, it will be my Honor to do what has to be done, which should have been done to Iran, by other Presidents, for the last 47 years. IT’S TIME FOR THE IRAN KILLING MACHINE TO END!”
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