WASHINGTON (dpa-AFX) - Shares of Warner Bros. Discovery (WBD) and Paramount Skydance (PSKY) jumped Monday after a report said Paramount and California's attorney general were in advanced settlement talks that could remove a key hurdle to their proposed merger.
Warner Bros. Discovery are up 10% in trading, while Paramount gained 9% on Monday morning.
The Wall Street Journal reported that proposed concessions include a $1.5 billion investment in California production, commitments not to sell either studio lot and potential penalties if Paramount fails to meet a pledge to produce 30 movies annually following the merger.
Other measures reportedly under discussion include selling certain cable channels and creating a board aimed at protecting CNN's editorial independence.
The lawsuit brought by California and 11 other states is among the final hurdles to Paramount CEO David Ellison's plan to combine the companies. A settlement could also help Paramount avoid a $7 million daily fee payable to Warner Bros. Discovery shareholders if the transaction remains unclosed after September 30.
No final settlement has been reached, and the terms remain subject to change.
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