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Paramount Skydance’s planned takeover of Warner Bros. Discovery hit a snag on Monday when a judge granted a temporary restraining order on the merger.
Paramount CEO David Ellison is seeking to acquire WBD in a $111 billion deal that was expected to close during the third quarter of this year, but California Attorney General Rob Bonta is leading a group of 12 state attorneys general who filed a lawsuit challenging the merger. The lawsuit claims the megadeal would “lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the U.S.”
After a Friday hearing, California District Judge Araceli Martínez-Olguín approved the temporary restraining order, putting a 14-day pause on the merger and blocking closure of the transaction.
“Having read the papers filed by the parties and carefully considered their arguments therein and those made at the hearing, as well as the relevant legal authority, and good cause appearing, the Court GRANTS the motion for TRO,” the judge wrote.
The lawsuit, filed in the U.S. District for the Northern District of California, claims that the merger violates Section 7 of the Clayton Act, which holds that mergers that may substantially lessen competition or tend to create a monopoly are illegal. Both sides argued their case on Friday but Martínez-Olguín initially declined to make a ruling from the bench, instead taking the weekend to think it over.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| PSKY | PARAMOUNT SKYDANCE CORP. | 8.75 | -0.39 | -4.27% |
| WBD | DISCOVERY INC. | 25.84 | -1.03 | -3.85% |
Plaintiffs’ motion for preliminary injunction is due by July 23, the Defendants’ opposition brief is due by July 27, and the Plaintiffs’ reply is due by July 30. A hearing on Plaintiffs’ preliminary injunction motion at 3:00 p.m. on Monday, August 3.
Ellison, the son of billionaire Oracle co-founder Larry Ellison, took control of Paramount last year when Skydance Media and Paramount Global completed an $8 billion merger. Adding WBD to his portfolio would make the younger Ellison one of Hollywood’s most powerful people.
This is a developing story. Please check back for updates.
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