Paramount is Requesting A $1.88 Billion Bond from State AGs Due to a Merger Case
On Monday, Paramount Skydance (PSKY.O) requested that a U.S. judge order twelve states contesting its takeover of Warner Bros. Discovery (WBD.O) to post a $1.88 billion bond to pay the costs of the tie-up’s delay.
If the $110 billion merger is not completed by September 30, the corporation will be required to pay a daily fee of $7 million. By the time the trial on the state’s legal challenge is over and the final legal briefs are filed in April, Paramount will have paid Warner Bros. shareholders an unrecoverable $1.3 billion in “ticking fees.”
Additionally, Paramount stated that the deal’s approval from the U.S. Justice Department will expire on February 19. The states have “ample resources to post” even a big bond, according to Paramount, which seeks to mandate the posting of the bond in order to recover losses in the event that the merger is approved by the court.
Delaying the acquisition until June 2027 will cost Paramount $190 million in additional financing charges in addition to $1.7 billion in “ticking fees” through June 1. In an attempt to acquire Warner Bros., Paramount offered the fees.
On July 13, California and eleven other states filed a lawsuit, claiming the agreement will establish a media giant with the authority to increase movie and television costs. To contest the agreement, the Writers Guild of America has also filed a lawsuit.
Bonta stated that Paramount had previously consented to the time that it is currently objecting to. “Now, they’re trying to get a do-over,” Bonta remarked. “Paramount approached this technique with an open mind. Once more, they are attempting to use blackmail to force us to give in while lying in a bed of their own creation.”
According to a Reuters analysis of recent cases, judges have taken an average of eight months to rule on similar merger challenges.