A formidable 12-state antitrust injunction threatens to trap the $110 billion combination of Paramount Skydance (NASDAQ: PSKY) and Warner Bros. Discovery (NASDAQ: WBD) in a protracted legal vacuum. Led by the California attorney general, this state-level intervention explicitly targets the scale of the proposed merger. When a transaction of this scale hits a regulatory wall, institutional arbitrageurs immediately begin repricing the acquisition premium relative to the standalone fundamentals of the underlying businesses.