Key facts
- Paramount Skydance CEO David Ellison is requesting a $1.88 billion bond from plaintiffs challenging the Warner Bros. Discovery merger.
- The merger is currently paused due to lawsuits from 12 states and the Writers Guild of America, citing anticompetitive concerns.
- Paramount has agreed to pay WBD shareholders a 'ticking fee' of nearly $7 million daily if the deal closure is delayed beyond October 1.
- The company estimates it will owe $1.3 billion in ticking fees by the trial's conclusion and is incurring additional unrecoverable costs.
- Paramount has already received regulatory approval from the US Department of Justice and the European Commission.
Paramount Skydance CEO David Ellison is urging the court to require plaintiffs challenging the company's proposed merger with Warner Bros. Discovery to post a nearly $1.9 billion bond. The demand comes as lawsuits filed by California and 11 other states, along with the Writers Guild of America, have put the acquisition on hold.
These legal challenges argue that the deal is anticompetitive. A federal judge has acknowledged the plaintiffs have raised "serious questions" and has scheduled a trial for early March. Ellison's company now wants the court to order these opponents to provide a $1.88 billion bond, which Paramount would receive if it ultimately wins the legal battle.
Paramount has committed to paying Warner Bros. Discovery shareholders a daily 'ticking fee' of approximately $7 million, commencing October 1, for any delay in closing the deal. The company estimates these fees could reach $1.3 billion by the trial's conclusion, in addition to other unrecoverable cost savings being missed.
However, M&A lawyer Corey Martin expressed skepticism about Paramount's request, stating it is "very unlikely" the judge would compel plaintiffs to cover the ticking fees through a bond. Paramount has already secured necessary approvals from other major regulatory bodies, including the US Department of Justice and the European Commission.