Skydance Hands Out 470.7 Million Warrants Struck At $12.00, Excluding The Ellisons And RedBird
The warrants trade separately on the NYSE and can be called early if the Class B stock closes at or above $30.00 on enough days.
Skydance issued 470,746,773 warrants as a dividend on Class B Common Stock on October 13, each exercisable for one Class B share at $12.00, according to an 8-K filed Tuesday. The same filing covers the Friday settlement of exchange and tender offers for Warner Bros. Discovery debt, after the company completed its acquisition of Warner Bros. Discovery on October 6.
The warrants: who gets them and how they work
Warrants went to Class B holders of record at the close of business on October 5, one per share, with an initial exercise price of $12.00 that is subject to anti-dilution adjustments. Holders pay cash to exercise, unless the registration statement covering the shares is not effective, in which case they receive a reduced number of shares without paying.
The Ellisons are excluded: Lawrence J. Ellison, David F. Ellison, Gerald J. Cardinale, the Lawrence J. Ellison Revocable Trust and RedBird Capital Partners Fund IV (Master), plus their affiliates. They are "Restricted Holders," and no warrant can be exercised by or for them, even if one is transferred to them. Shares held by the Paramount Global 401(k) Plan and Paramount Global Master Trust get no warrants. They will instead receive a number of shares to be determined after the distribution.
The warrants expire at 5:00 p.m. New York time on October 13, 2036. After October 13, 2029, the company may set an earlier expiry if the Class B closing price is at least $30.00 on 20 of any 30 consecutive trading days. Holders then get notice of 20 to 45 scheduled trading days, according to the warrant FAQ. The company says warrants left unexercised or unsold at expiry have no value.
The debt exchange and tender settled Friday
On October 9, Skydance issued $11,983,970,000 and €546,547,000 of senior secured second-lien notes. These went to holders who exchanged Warner Bros. Discovery subsidiary notes, and about 99.15% of that principal was tendered. The company received no cash proceeds from the exchange.
In the cash tender offers, about 98.83% of the principal amount was tendered. Skydance bought $2,395,448,000 of notes for $2,380,201,732.56 in cash, plus accrued interest. Notes not tendered remain obligations of the Discovery issuers, per the October 6 release.
The new notes rank behind the credit facilities and first-lien notes. The filing also says holders of certain older notes would get $100 per $1,000 of principal if the junior-lien exchange offers have not begun by March 4, 2027.
Trading dates
Per the company's FAQ, when-issued trading runs only on Tuesday under SKYD WSWI. Regular-way trading under SKYD WS starts Wednesday, also the ex-dividend date for the Class B stock. Brokers' accounts will not be credited with warrants until Wednesday at the earliest, and the earliest settlement date for trades is Thursday. The company says no established trading market exists for the warrants.
Any early expiry cannot be set before the October 13, 2029 mark, and the warrants otherwise run to October 13, 2036.
Sources
- 8-K Filing — Skydance Corp (SKYD) — SEC EDGAR
- Exhibit tm2626659d12_ex99-1.htm — Skydance Corp 8-K exhibit — SEC EDGAR
- Exhibit tm2626659d12_ex99-2.htm — Skydance Corp 8-K exhibit — SEC EDGAR
- Exhibit tm2626659d12_ex99-3.htm — Skydance Corp 8-K exhibit — SEC EDGAR
- Ellison family's $17 billion investment in Skydance Warner Bros. deal — qz.com
- SKYD Stock In Focus: Ellison Family Bets $17B On Skydance — What’s Next For The New Media Giant — Yahoo Finance
- Skydance Is Merging Paramount And Warner Bros.' Game Studios Into One Unit - GameSpot — gamespot.com
- Skydance To Make Paramount & Warner Bros. Lots Specialized In Film, TV — deadline.com
- Skydance slips 7% amid merger closing and debt concerns (SKYD:NYSE) | Seeking Alpha — seekingalpha.com
