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Commitments from Middle East entities will help offset costs for Ellison family

Paramount PSKY 2.92%increase; green up pointing triangle is in talks to secure signed equity commitments of close to $24 billion from three sovereign-wealth funds led by Saudi Arabia to help back its takeover of Warner Bros. Discovery WBD -0.62%decrease; red down pointing triangle, according to people familiar with the matter.

Saudi Arabia’s Public Investment Fund has agreed to provide roughly $10 billion of the nearly $24 billion to Paramount, run by David Ellison, the son of billionaire Oracle co-founder Larry Ellison.

The agreements with investors, including Qatar Investment Authority and Abu Dhabi’s L’imad Holding Co., are likely to be signed as soon as Monday, the people said.

The expected agreements by the Middle East funds coincide with the region’s increased economic and political unrest caused by the U.S. and Israel’s war with Iran. In February, Paramount announced its deal to buy Warner Discovery, home to HBO, CNN and Harry Potter, for $81 billion. The deal is pending regulatory review in Europe, and Paramount executives have told employees to prepare to close as soon as the end of July, according to other people familiar with the situation.

The commitments by the Gulf investors will help offset the cost for the Ellisons and RedBird Capital Partners, which is also backing the deal. As part of its deal, Paramount has said any equity syndication wouldn’t affect the transaction closing because the Ellison family would cover the entire amount if needed.

The Gulf investors won’t have voting rights in the new Paramount-Warner entity, and the deal isn’t expected to trigger a mandatory review by the Committee on Foreign Investment in the U.S., or Cfius, people familiar with the matter said. Because each entity will own far less than 25% of the combined company, executives don’t expect the funds’ involvement to spark a review by the Federal Communications Commission either, the people said.

Paramount had previously disclosed that three sovereign-wealth funds had committed to contribute about $24 billion to its bid. Paramount launched a hostile bid for Warner, which had opted to sign a deal to sell to Netflix instead. After months of jockeying, Paramount emerged victorious when it sweetened its offer for Warner, defeating Netflix.

An early version of Paramount’s bid also initially included backing from Chinese company Tencent and Affinity Partners, the private-equity firm founded by President Trump’s son-in-law Jared Kushner. Affinity later backed out of Paramount’s deal. Tencent is also no longer in the deal, the people said.

Paramount has also received $54 billion of debt commitments from Bank of America, Citigroup and the private-equity firm Apollo Global Management, which it is beginning to syndicate out to other banks and investors.