Paramount has filed a request in court seeking to compel the group of state attorneys general (AGs) who are challenging its proposed $110 billion merger with Warner Bros. Discovery (WBD) to post a $1.88 billion bond to cover the costs associated with delaying the deal's closure [1]. The trial between Paramount and the state AGs is scheduled for March [1]. The bond amount is based on Paramount's calculation of ticking fees and other costs it will incur due to the holdup [1].
The group of state AGs, led by California's Rob Bonta, filed an antitrust lawsuit in July, arguing that the merger would violate the Clayton Antitrust Act, which prohibits anticompetitive mergers and acquisitions [1]. Paramount has already received regulatory approvals from the U.S. Department of Justice's Antitrust Division and all other global jurisdictions necessary to proceed with the merger [1]. However, Paramount agreed last month to delay the acquisition until as late as June 2027 while the state AGs' case proceeds to trial [1].
Under the terms of the merger agreement, Paramount is obligated to pay a ticking fee to WBD shareholders, starting at 25 cents per share per quarter from September 30 until the deal closes [1]. This could amount to approximately $650 million in cash value per quarter, and Paramount estimates it will have paid an unrecoverable $1.3 billion in ticking fees alone by the time the trial concludes and final briefs are submitted [1]. Paramount argues that each month of delay results in substantial and quantifiable financial consequences and that federal law requires plaintiffs to post a bond covering potential harm from halting a transaction to litigate [1].
A representative from California AG Rob Bonta's office did not immediately respond to a request for comment on Monday [1]. Paramount had originally planned to close the deal by the end of September, and the ongoing delay could prove costly for the company [1].
CONCLUSION
Paramount's request for a $1.88 billion bond highlights the significant financial impact of the merger delay with Warner Bros. Discovery. With ticking fees potentially reaching $1.3 billion by the end of the trial, the outcome of the antitrust case could have major implications for both companies and their shareholders.