- Discovery Communications Inc. Class A
- 01 February 2022 13:11:07
Source: Sharecast
Shareholders of AT&T will own a 71% stake in the new company, Warner Bros. Discovery, and receive an estimated 0.24 shares of Warner Bros. on a tax-free basis, in exchange for each AT&T share that they now own.
"In evaluating the form of distribution, we were guided by one objective — executing the transaction in the most seamless manner possible to support long-term value generation,” said AT&T chief executive officer John Stankey.
"We are confident the spin-off achieves that objective because it's simple, efficient and results in AT&T shareholders owning shares of both companies, each of which will have the ability to drive better returns in a manner consistent with their respective market opportunities."
The board of AT&T also approved a post-close annual dividend of $1.11 per AT&T share which it said was expected to result in one of the highest dividend yields in corporate America.
Under the terms of the deal, AT&T said that it would receive $43bn, subject to adjustments, in a combination of cash and other consideration.
Transaction close was expected to take place during the second quarter.
Stock in the new company will trade on the NASDAQ Global Select Market under the ticker symbol WBD.
As of 1306 GMT, shares of AT&T were trading 5.88% lower to $24.0 and Discovery Inc.'s series A shares were off by 4.16% at $26.75.
