Wall Street is placing its bets on the biggest media merger in a generation. Warner Bros. Discovery shares have climbed nearly 7.5% over eight trading days, pushing the merger arbitrage spread down to roughly $3 per share, the narrowest gap since March. That’s the market’s way of saying it thinks Paramount Skydance’s $110.9 billion acquisition will cross the finish line, twelve angry state attorneys general notwithstanding.
The spread had ballooned past $5 per share after a coalition of states sued to block the deal in July. Its rapid compression tells a clear story: traders are growing more comfortable that the legal headwinds won’t sink this transaction.
The deal so far
Paramount Skydance announced its bid for Warner Bros. Discovery on February 27, 2026, offering $31 per share in cash. The price tag reflected a competitive process that at one point drew interest from Netflix, though the streaming giant ultimately stepped away.
Federal regulators moved surprisingly fast. The US Department of Justice granted antitrust clearance on June 12, and UK regulators followed with their own approval on August 6. For a deal of this magnitude, clearing two major regulatory hurdles within six months of announcement is a relatively brisk pace.
