As Paramount Skydance inches closer to finalizing its proposed $111 billion merger with Warner Bros. Discovery, uncertainty lingers regarding the timeline for the deal’s completion. Despite the anticipation, company officials are preparing for the transaction to close within the forthcoming weeks.
Paramount’s Stock Transition
In a recent SEC filing, Paramount disclosed that its board made a significant decision to voluntarily withdraw its Class B common stock from the Nasdaq Global Select Market, where it is currently traded under the ticker “PSKY.” This stock will be transferred to the New York Stock Exchange, with trading expected to cease on Nasdaq at market close on or about October 5, and begin on the NYSE at market open on or about October 6.
Warrants Distribution and Conditions
In conjunction with this transition, Paramount set a record date of October 5 for the distribution of warrants. These warrants will provide holders the option to purchase shares of Class B Common Stock on the NYSE, scheduled to commence trading on October 13. However, Paramount emphasized that the distribution is contingent upon the successful closure of the acquisition of Warner Bros. Discovery. The merger is still subject to further closing conditions, leaving the ultimate timeline for completion “not yet certain.” Consequently, Paramount retains the option to cancel or postpone the record date or issuance date for the warrants.
Warner Bros. Discovery’s Actions
On a parallel note, Warner Bros. Discovery announced plans to voluntarily delist its Euro Notes debt securities from Nasdaq, including 4.302% senior notes due in 2030 and 4.693% senior notes due in 2033. The company expects to file a notification with the SEC on or around October 6 as part of this process.
Settlement with State Attorneys General
A significant step towards clearing the path for the merger occurred this week, as Paramount reached a settlement with 12 Democratic state attorneys general regarding an antitrust lawsuit aimed at blocking the deal. If approved by the court, the settlement would resolve the lawsuit without requiring major concessions from Paramount. The judge is currently reviewing the proposed settlement but has requested responses to Senator Cory Booker’s (D-N.J.) suggestion for an independent review of the consent decree by September 28.
Additional Financial Obligations
Beginning October 1, Paramount will incur a daily “ticking fee” of $7 million owed to Warner Bros. Discovery shareholders until the merger is finalized. This fee underscores the financial pressures associated with the finalization of the deal.
Details on Warrant Allocations
Paramount plans to issue approximately 470 million warrants on October 5. In lieu of receiving warrants, shares of Class B Common Stock held by the Paramount Global 401(k) Plan and the Paramount Global Master Trust will be exchanged for additional Class B Common Stock.
According to initial proposals, each warrant will entitle holders to purchase one share of Class B Common Stock at an exercise price reflecting the average daily volume-weighted price over 20 trading days, culminating on the third business day prior to the merger’s closing. This price will be negotiated between a maximum of $16.02 and a minimum of $12.00 per share.
