California Attorney General Rob Bonta canceled Monday’s planned settlement meeting with Paramount Skydance (Paramount Skydance Corp (NASDAQ:PSKY) over the company’s proposed acquisition of Warner Bros. Discovery, accusing Paramount of acting in bad faith.
According to a report in The New York Times, Bonta’s office accused Paramount of leaking and misrepresenting details from a preliminary meeting held Friday, prompting the attorney general to call off talks that were intended to explore a settlement.
The canceled meeting came after reports that California was expected to seek the sale of some cable channels and structural safeguards separating the companies' movie studios as conditions for settling the antitrust case.
California and 11 other states sued last month to block the transaction, arguing the combination would reduce competition in theatrical film distribution and cable television and could hurt consumers, theaters and workers.
Paramount has pledged to release at least 30 theatrical films a year after the merger, but the states have argued that commitment would not adequately address their antitrust concerns.
Paramount’s proposed acquisition values Warner Bros. Discovery at $81 billion in equity value and $110 billion in enterprise value, which includes debt and other liabilities assumed in the transaction.
The Justice Department and regulators in dozens of other countries have cleared the transaction, but the state lawsuits remain a major obstacle to closing the deal.
Paramount faces financial pressure to complete the transaction, with Warner Bros. Discovery shareholders entitled to a quarterly ticking fee if the deal remains unclosed after September 30.
The breakdown in settlement discussions leaves the antitrust case unresolved as Paramount seeks to complete one of the largest media transactions in the industry.
