Paramount is citing a federal law in asking 12 states and the Writers Guild of America to post a $1.88 billion bond in their antitrust lawsuits. The lawsuits have halted a $110.8 billion acquisition of Warner Bros. Discovery by Paramount. A federal law protects mergers and acquisition parties from “potential harm” from halting the deal for litigation.
Paramount is trying to get the states and Writers Guild of America to pay for the timer portion of their proposed deal that would increase the cost by about $7 million per day if it doesn’t close before September 30. As of now, that doesn’t look like it’ll happen as Paramount has agreed to halt the deal until their lawsuit with a dozen attorneys general is over or June 1, 2027.
A trial is set for March 2, 2027 and believed to last 17 days. The delay through the trial, about 169 days, will cost the company $1.15 billion.
California Attorney General Rob Bonta who is leading the case for the states has said it’s a move by Paramount to get the plaintiffs to back down. Paramount CEO David Ellison has threatened to move Paramount out of California if the states don’t negotiate a settlement.
Paramount and Warner Bros. are two sophisticated companies who willfully decided to include a costly ticking fee [to shareholders] as a provision in their merger contract. They knew this merger would undergo regulatory review; they knew it was not a done deal; and they chose to include it anyway.
What’s more, Paramount itself stipulated to the timing it is now protesting — they agreed to the dates and did not request a bond as a condition of agreeing not to close until after the trial, and potentially as late as June 2027. Now, they’re trying to get a do-over.
Bottom line: Paramount went into this process with eyes wide open. They are lying in a bed of their own making, and once again, trying to blackmail us to get us to back down.
-Office of Attorney General Rob Bonta
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Source: Graphic Policy
