Credit...Haiyun Jiang for The New York Times
Jared Kushner’s Affinity Partners Pulls Out of Bid for Warner Bros. Discovery
Affinity Partners, Mr. Kushner’s private equity firm, played a small financial role in Paramount’s $108 billion offer, but it had attracted political attention to the deal.
by https://www.nytimes.com/by/lauren-hirsch · NY TimesJared Kushner’s private equity firm, Affinity Partners, is no longer participating in a bid to acquire Warner Bros. Discovery, a spokesman for the firm said Tuesday.
Affinity Partners emerged as a small investor in Paramount’s roughly $108 billion offer, which Warner Bros. Discovery has rejected in favor of a deal with Netflix. Paramount has now taken its offer to shareholders and is awaiting an official response from Warner Bros. Discovery.
“With two strong competitors vying to secure the future of this unique American asset, Affinity has decided no longer to pursue the opportunity,” the spokesman for Affinity said in a statement.
“The dynamics of the investment have changed significantly since we initially became involved in October,” the statement continued. “We continue to believe there is a strong strategic rationale for Paramount’s offer.” Bloomberg reported earlier that Affinity had dropped out of the bid.
Paramount submitted its first bid for Warner Bros. Discovery in mid-September. After its third bid, in mid-October, Warner Bros. Discovery put itself up for sale, saying it had received interest from multiple suitors. Paramount submitted three additional bids before Warner Bros. Discovery chose to sell a large part of its business to Netflix this month.
Mr. Kushner, who is President Trump’s son-in-law, started his private equity firm, which has raised billions from Saudi Arabia’s sovereign wealth fund, after Mr. Trump’s first term. The firm, which has roughly $5.4 billion under management, had been known primarily for taking small stakes in companies but has more recently become involved in large deals, like a roughly $55 billion acquisition of Electronic Arts.
Mr. Kushner’s involvement in the deal attracted significant scrutiny in part because of Warner Bros. Discovery’s ownership of CNN. Mr. Trump has long been critical of the network, and, if Paramount succeeded in buying Warner Bros. Discovery with Affinity’s help, his son-in-law would have owned a piece of the news channel’s parent company. In addition, Mr. Trump has said he would be “involved” in any regulatory review of the deal.
The withdrawal of Affinity Partners is not expected to have a significant financial impact on Paramount’s deal for Warner Bros. Discovery. A revocable trust fund run by Larry Ellison, the billionaire father of Paramount’s chief executive, David Ellison, is backstopping the vast majority of the $40 billion equity check required for the deal, while also getting contributions from additional partners.
In Paramount’s previous bids, sovereign wealth funds from the Middle East said they would contribute roughly $24 billion to the deal. Mr. Kushner’s Affinity Partners was expected to invest a far smaller check, closer to $200 million, a person familiar with the matter said.