Paramount seeks $1.9 billion bond from states and writers guild over Warner merger delay
Paramount has asked a federal judge to require a coalition of 12 states and the Writers Guild of America to post a bond covering up to $1.9 billion in potential fees if the Warner Bros. Discovery merger is delayed beyond its September deadline.
Paramount Skydance, led by David Ellison, filed a motion in federal court asking that California Attorney General Rob Bonta and a coalition of 11 other state attorneys general, together with the Writers Guild of America, post a bond of up to $1.9 billion. The bond would cover "ticking fees" that Paramount has agreed to pay Warner Bros. Discovery shareholders if the merger is not completed by the anticipated September 30 deadline.
The filing argues that the states and the guild should bear part of the financial risk associated with the antitrust lawsuit they have brought to block the $111 billion transaction. Under the Clayton Antitrust Act, plaintiffs can be required to post a bond to cover potential harms to a defendant.
Paramount contends that it has satisfied all regulatory conditions, having received clearances from 68 jurisdictions, and that the lawsuits filed by the states and the guild are the only remaining obstacles. The company warned that, if the trial proceeds, it could face $1.3 billion in accrued ticking fees, calculated at 25 cents per share each quarter until the deal closes.
Bonta’s office rejected the request, calling the bond demand a form of "blackmail" and noting that Paramount had previously not sought such a bond. The judge has not ordered a bond but has set a trial date for March 2, later than Paramount had sought.
Paramount also indicated it may consider relocating its headquarters from Los Angeles to Tennessee or Texas amid the dispute. The company’s shares rose 1.4 percent after the filing, while Warner Bros. Discovery shares were unchanged.