PSKY, WBD Stocks Soar After-Hours — Report Says Paramount Is In Advanced Talks With California AG To Settle Antitrust Suit

• Twelve states, led by California Attorney General Rob Bonta, sued in July to block Paramount's roughly $110-billion takeover of Warner Bros. 
• According to WSJ, settlement talks are ongoing, and a deal is not assured.
• A court-ordered settlement conference with Paramount,  Bonta’s office and the Writers Guild of America West, which has filed a separate challenge to the merger, is set for October 14-15.

Paramount Skydance (PSKY) is in advanced settlement talks with California officials to resolve an antitrust lawsuit blocking its bid for Warner Bros. Discovery, The Wall Street Journal reported on Friday, citing people familiar with the matter. 

The talks are meant to clear the last major U.S. legal hurdle to a combination that would join two Hollywood studios, streaming platforms, and a large group of cable networks, including brands such as CNN, CBS, HBO, MTV, and Comedy Central. 

PSKY shares rose 9% after hours, while WBD jumped 8%. 

The Challenge And Resolution Talks

Twelve states, led by California Attorney General Rob Bonta, sued in July to block the roughly $110-billion takeover. They argue the combined company would squeeze competition in wide theatrical releases, big-budget films, and basic-cable licensing. The federal government and regulators in 68 global jurisdictions have already cleared the deal. A trial is set for March.

According to WSJ, settlement talks are ongoing, and a deal is not assured. The parties have reportedly discussed options, including the company operating the two studios separately for a while. 

What Each Side Wants

Bonta has previously said that he wants structural fixes, such as selling assets. Paramount has offered behavioral promises, including at least 30 theatrical releases a year with 45-day windows. Last month, Bonta canceled a planned meeting, accusing Paramount of leaking and misstating earlier talks. Paramount denied being the source and said it was ready to keep talking.

Paramount Chief executive David Ellison has also warned he could begin moving operations out of California if talks fail. 

Settlement Conference Slated For October 

A court-ordered settlement conference with Paramount,  Bonta’s office and the Writers Guild of America West, which has filed a separate challenge to the merger, is set for October 14-15. 

If the deal is not closed by around October 1, Paramount must start paying Warner Bros. shareholders a “ticking fee” of about $7 million a day. That cost could run well over $1 billion if the fight lasts until the March trial.

How Did PSKY, WBD Retail Traders React?

On Stocktwits, retail sentiment around PSKY and WBD stayed ‘bearish’ over the past 24 hours.

While PSKY stock has fallen 24% year-to-date, WBD shares have lost 4%.

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