(Sept 19): Paramount Skydance Corp has been negotiating a settlement in recent weeks with California and other state attorneys general challenging its US$110 billion (RM449.21 billion) takeover of Warner Bros Discovery Inc, according to people familiar with the matter.
Those talks have advanced in recent days, according to one of the people, who said a deal could potentially be reached in the coming days, though negotiations are ongoing. Any settlement would likely need the support of all 12 Democratic states along with the Writers Guild, which has a separate lawsuit challenging the deal, said the people, who were granted anonymity to discuss a confidential process.
Paramount shares rose as much as 8.7% in after-hours trading following a Wall Street Journal report that the company was in advanced talks with California officials about settling litigation surrounding its proposed acquisition of Warner Bros.
Reuters reported that a settlement could come this weekend or Monday. Warner Bros shares climbed 8.6% after hours.
A California judge has also ordered settlement talks, which have been formally scheduled for Oct 14-15. A trial date isn’t scheduled until March.
A spokesperson for Paramount declined to comment. A spokesperson for California Attorney General Rob Bonta said potential settlement talks are confidential and that his office “cannot confirm or deny whether settlement talks are occurring or their alleged substance”.
Paramount has made offers to settle the suits, including promises to release 30 films a year in theatres and to increase production of TV shows.
Bonta has said he doesn’t favour those types of behavioural remedies because they are hard to enforce. The attorney general has said he prefers structural changes, such as a sale of assets.
California’s top law enforcer told Bloomberg TV on Thursday that a sale of some intellectual property “could be a component” of a settlement. The deal would bring well-known Warner Bros movie franchises such as DC Comics, Harry Potter and The Lord of the Rings into the Paramount fold.
Others have speculated that Paramount might sell some of the Warner Bros cable-TV channels, such as TBS and CNN, to win over the parties who are suing. Paramount has threatened to leave the state if it cannot reach a settlement allowing the deal to close.
Paramount will be required to pay late fees of US$7 million a day to Warner Bros starting at the end of this month if a deal is not reached. A failed aquisition would force it to pay US$7 billion to Warner Bros.
“Paramount has strong reasons to reach a workable compromise,” Bloomberg Intelligence analyst Geetha Ranganathan wrote in a research note Friday.
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