Warner Bros. Discovery shareholders are set to vote on the company’s pending, $110 billion merger with Paramount Skydance during a special meeting on April 23 at 10 a.m. ET.
The media giant has also started mailing the definitive proxy statement to shareholders in connection with the special meeting. Shareholders of record as of March 20 at 5 p.m. ET will be entitled to vote.
Under the terms of the deal, WBD shareholders will receive $31 per share in cash for each share of WBD common stock they own, which represents a 147% premium to the company’s unaffected stock price of $12.54 per share.
The transaction is funded by $47 billion in equity, which backstopped by the Ellison family and RedBird Capital Partners, though it may include other strategic and financial partners at closing. It also includes $54 billion of debt commitments from Bank of America, Citigroup and Apollo.
The debt financing consists of $15 billion to backstop WBD’s existing bridge facility and $39 billion of incremental new debt. It excludes $3.5 billion of bridge financing from these institutions to backstop an existing $3.5 billion revolving credit facility.
Existing Paramount stockholders will have the opportunity to participate in a rights offering of up to $3.25 billion of Class B Paramount stock alongside the new equity investment, which is expected to occur closer to the closing date at a price of $16.02 per share.
The transaction, which was unanimously approved by the boards of directors of both companies, is expected to close in by the third quarter, subject to customary closing conditions, including regulatory clearances and shareholder approval.
“The WBD Board has been guided by the singular principle of securing a transaction that maximizes the value of our iconic assets and delivers as much certainty as possible to our shareholders,” WBD board chairman Samuel Di Piazza, Jr. said in a statement. “This historic transaction with Paramount not only does that, but it will also expand consumer choice and develop new opportunities for creative talent.”
“We look forward to the upcoming Special Meeting. This transaction is the culmination of the Board’s robust process to unlock the full value of our world-class portfolio,” WBD CEO David Zaslav added. “I want to thank our talented team for transforming the business over the last several years. We are working closely with Paramount to close the transaction and deliver its benefits to all stakeholders.”
In the event the transaction does not close by Sept. 30, WBD shareholders will receive a 25 cent per share “ticking fee” for each quarter until closing. In the event that the deal does not close at all due to regulatory matters, Paramount will pay WBD a $7 billion termination fee.
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