Home / Business and Economy / States, WGA Challenge $1.9B Bond in WBD Merger
States, WGA Challenge $1.9B Bond in WBD Merger
1 Sep
Summary
- Paramount faces a $1.9 billion bond request for Warner Bros. Discovery merger.
- A group of 12 state attorneys general and WGA oppose the bond posting.
- Paramount argues bond is needed to cover costs if the challenge fails.
A coalition of 12 state attorneys general and the Writers Guild of America are challenging Paramount's request for a $1.9 billion bond. This bond is linked to financing costs for the company's pending merger with Warner Bros. Discovery. The group argues that Paramount voluntarily agreed to these responsibilities and should not now attempt to offload them.
Paramount is set to begin paying a significant ticking fee on October 1, amounting to $650 million per quarter until the merger closes. Additionally, a $7 billion termination fee is on the table if the deal fails due to regulatory issues. The outside date for the $110 billion transaction is June 4, 2027.
The states and WGA contend that no bond is necessary, especially after a judge granted a temporary restraining order, recognizing the lawsuit's aim to enforce public interests. They assert that Paramount has not demonstrated any change in circumstances to justify altering the agreed-upon terms. Paramount counters that under the Clayton Act, plaintiffs blocking a transaction must post a bond to cover potential harm if their challenge fails.
