Paramount Skydance has requested that a dozen states opposing its acquisition of Warner Bros Discovery post a $1.88 billion bond. The company argued in a federal court filing on Monday that the bond is necessary to cover costs incurred due to delays in finalizing the $110 billion merger.
Paramount stated that if the merger does not close by September 30, it faces a daily fee of $7 million. By the projected conclusion of the states' legal challenge in April, following a March trial, Paramount anticipates paying $1.3 billion in unrecoverable "ticking fees" to Warner Bros shareholders.
Further "ticking fees" through June 1 amount to $1.7 billion, with an additional $190 million in financing costs if the merger is delayed until June 2027. Paramount is pursuing the acquisition with the aim of transforming its company into a major competitor to streaming giants like Netflix and Disney.
The Justice Department's approval of the deal is set to expire on February 19. Paramount wants the bond posted so that it can recover losses should a court ultimately approve the merger, asserting that the states possess "ample resources to post" such a bond.
California and 11 other states filed a lawsuit on July 13, asserting that the proposed merger would create a media conglomerate with the power to increase prices for film and television content. The Writers Guild of America has also initiated legal action to challenge the deal.
Paramount previously agreed in late July to pause its acquisition efforts until a ruling is made on the states' challenge. Reviews of recent similar merger cases indicate that judges typically take an average of eight months to issue a ruling.
Despite the legal challenges within the United States, Paramount noted that regulatory bodies in at least 68 countries have either approved the merger or have not opposed it, suggesting that the domestic lawsuits represent the primary obstacle to the deal's completion.