The proposed deal would create an entertainment company combining Paramount+ with HBO Max and adding brands such as CNN, HBO, DC, CBS and Cartoon Network|Patrick Pelster|CC BY-SA 3.0 DE

Settlement talks between Paramount Skydance and California Attorney General Rob Bonta were set for today over the challenge to the company's $111 billion takeover of Warner Bros. Discovery.

But Bonta has canceled the meeting, citing what he called bad-faith conduct by the company, according to The New York Times.

California and 11 other states have challenged the merger, saying it could weaken competition and hurt workers and consumers. Bonta said Paramount would need major changes to address those concerns.

Bonta canceled the meeting late Sunday, accusing Paramount of acting in bad faith. In a statement to The Times, he said the company had leaked details of Friday’s meeting.

Both sides are under pressure to reach a deal. Paramount faces costly delays in closing the acquisition while the lawsuit is pending. It has warned it could move its operations out of California if the dispute continues. 

Meanwhile, California’s governor, the Directors Guild of America, and others are urging Bonta to resolve the case.