Warner Bros, Paramount rise on report California settlement talks could clear merger hurdle

By Reuters News

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.

Here are some more details:

  • 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.

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