Paramount has established an October 5 record date for distributing warrants related to its proposed $111 billion acquisition of Warner Bros. Discovery, though the studio cautioned that the merger’s completion is not yet guaranteed. In a Securities and Exchange Commission filing released on Friday, Paramount announced it plans to withdraw its Class B common stock listing from the Nasdaq Global Select Market and move it to the New York Stock Exchange.
The company indicated that Nasdaq trading is expected to conclude around market close on or about October 5, with NYSE trading set to begin at market open on or about October 6. Consequently, the board selected the close of business on October 5 as the record date for the warrant distribution, which would allow eligible shareholders to purchase shares of Class B Common Stock on the new exchange beginning October 13.
However, Paramount stressed that the issuance of these warrants is conditional upon the successful closing of the acquisition. The filing noted that the merger remains subject to additional closing conditions and that “the ultimate timing for the closing of the WBD Merger, if any, is not yet certain.” As a result, the board reserves the right to cancel or postpone the record date or the warrant issue date.
The warrants are designed to give existing holders of Paramount Skydance’s Class B Common Stock a chance to buy shares in a new entity under terms similar to those provided to the equity syndicate supporting the deal, which includes David Ellison, his father Larry Ellison, and Gerry Cardinale of RedBird Capital Partners. Approximately 470 million warrants are expected to be issued on October 5.
Shares held by the Paramount Global 401(k) Plan and the Paramount Global Master Trust will receive actual Class B Common Stock rather than warrants. If issued, each warrant would initially entitle the holder to purchase one share at an exercise price based on the average daily volume-weighted average price of the stock over the 20 trading days ending on the third business day prior to the merger’s closing, capped at a maximum of $16.02 and a floor of $12.00 per share.
$111 billion and they can’t even guarantee the closing date? Typical Hollywood uncertainty. I’m staying on the sidelines.
Wait, so I get warrants instead of actual stock? That feels like a loophole. What if the merger falls apart?
Moving to the NYSE is a big signal they’re betting on this deal closing. Hope the regulators agree.