Warner Bros, Paramount rise on report California settlement talks could clear merger hurdle
Warner Bros, Paramount rise on report California settlement talks could clear merger hurdle Sept 21 (Reuters) - Shares of Warner Bros Discovery and Paramount Skydance jumped on Monday, after a report said Paramount and California's attorney general were in advanced settlement talks that could clear one of the final hurdles to the companies' $110 billion merger.
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Warner Bros WBD.O rose 7.9% in premarket trading, while Paramount PSKY.O gained 6.8%, set to add a combined $6.30 billion to their valuations if gains hold.
The Wall Street Journal reported on Sunday that the two sides have discussed a range of concessions, including a $1.5 billion investment in production in California, a commitment not to sell either studio lot, and potential penalties if Paramount fails to honor a pledge to produce 30 movies a year after the merger.
Other measures under consideration include selling some cable channels and creating a board to help ensure CNN retains editorial independence, WSJ reported.
The case brought by California and 11 other states is one of the final hurdles to Paramount CEO David Ellison's bid to combine two of Hollywood's biggest studios into a major rival to Netflix NFLX.O and Disney DIS.N.
A settlement would also help Paramount avoid a $7 million daily fee it owes Warner Bros shareholders for each day the deal does not close past September 30.
(Reporting by Anhata Rooprai in Bengaluru; Editing by Devika Syamnath)
((Anhata.Rooprai@thomsonreuters.com))