Paramount Presses States to Put Up $1.88B Bond for Merger Delay Costs

Paramount is urging a group of states and the Writers Guild of America to post a $1.88 billion bond to compensate for losses caused by litigation blocking its $111 billion merger with Warner Bros. The company argues that the bond is required under antitrust law and federal injunction procedures, citing the daily payments owed to Warner shareholders once the deal misses its October deadline. The states have opposed the demand, claiming Paramount is shifting responsibility it previously accepted to win shareholder support.

The bond request stems from a July court order that paused the transaction, pushing the closing past an October deadline that triggers daily compensation to Warner Bros. shareholders. Paramount argues the Clayton Act mandates this security, while opposing states contend the studio voluntarily accepted the delay to secure shareholder backing against a rival Netflix bid.

Legal precedent suggests courts rarely grant such large bonds in merger challenges, as seen when a judge awarded only $10,000 against a $150 million request in a prior case. Despite approvals from regulators in 69 countries, these lawsuits remain the sole obstacle to finalizing the transaction.