Connect with us

International Circuit

Date set by Discovery for shareholder vote on WarnerMedia deal

Discovery investors will be asked to approve the $43 billion deal to combine with WarnerMedia, which AT&T is spinning off, at a March 11 virtual meeting.

Discovery announced the date in a letter to shareholders, which it disclosed in an SEC filing Thursday. On that same day, AT&T has scheduled a virtual investor conference where the company said it will provide “additional insight and expectations for financial and operational performance of AT&T’s Communications segment” following the close of the WarnerMedia transaction.

The pact cleared a major hurdle this week after U.S. regulators gave it the green light. According to industry sources, AT&T and Discovery expect the WarnerMedia spin and merger with Discovery — to form Warner Bros. Discovery — to close as soon as early April.

The special meeting of Discovery stockholders is scheduled for March 11, 2022, as an online via live audio webcast at this link. “For the health and well-being of our stockholders, employees and directors, we have determined that the Discovery special meeting will be held in a virtual meeting format only, with no physical in-person meeting,” the media company said in the letter.

Discovery chief David Zaslav will become president and CEO of WBD upon deal close. WarnerMedia CEO Jason Kilar is expected to exit. Among senior execs Zaslav needs to install post-merger is a new leader for CNN, following the ouster of ouster of Jeff Zucker after a company investigation found he hadn’t disclosed a consensual relationship with CNN marketing chief Allison Gollust.

At the close, AT&T expects to reap $43 billion (and the new WBD plans to assume up to approximately $43 billion of additional debt). AT&T aims to use the proceeds from the WarnerMedia spinoff to pay down net debt, which stood at $156.2 billion at the end of 2021.

Last week week, AT&T announced that the WarnerMedia divestiture will be structured as a spinoff ahead of its combo with Discovery, giving its shareholders pro-rata shares in the newly created Warner Bros. Discovery. The telco had been mulling a split-off, in which stockholders would have had to decide whether to convert AT&T shares into WBD share; by doing a conventional spinoff, AT&T avoids what would have been an immediate referendum on the capital-intensive streaming strategy of the new media entity.

Under the terms of the pact, AT&T shareholders will hold 71% of the new WBD, while existing Discovery shareholders will own 29%.

The board of Warner Bros. Discovery will comprise 13 members, seven initially appointed by AT&T, including the chairperson of the board. Discovery has designated six members: Zaslav, Robert Bennett, John Malone, Paul Gould and Steven Miron (each of whom is a current Discovery board member); and Steven Newhouse. The AT&T board appointees “will be named prior to the closing,” per Discovery’s shareholder letter. Variety

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2021.Broadcast and Cablesat

error: Content is protected !!