As it awaits final approval of its settlement with 12 state attorneys general that will seal its acquisition of Warner Bros. Discovery, Paramount Skydance is putting out a $44 billion debt offering to finance the industry-changing merger.
The debt offering, which was filed with the SEC on Monday, includes $32 billion in investment-grade debt and $12.4 billion in high yield bonds. The proceeds from the debt offering will be combined with equity and term loan financing as well as cash on hand to fund the $110 billion purchase of Warner Bros. Discovery.
The offering comes as Paramount Skydance awaits word from U.S. District Judge Araceli Martinez-Olguin on whether she will approve the settlement that the company made with California AG Rob Bonta that would clear the final regulatory hurdle for the merger. The judge declined to approve the settlement at a Sep. 24 hearing, instead allowing for a few days for oppositional amicus briefs to be filed by Monday. Martinez-Olguin has not offered a timetable on when she will make a decision, something that Paramount acknowledged in the SEC filing for the debt offering.
“The actual closing date of the acquisition is uncertain,” Paramount said in an SEC filing. The merger “will only be consummated following the satisfaction or waiver of the closing conditions in the WBD merger agreement.”
For the purposes of the filing, Paramount is estimating that it will close the merger on Oct. 7, which would mean it would have to pay a week’s worth of ticking fees to Warner Bros. Discovery shareholders that would amount to roughly $49 million on top of a $31 per share payout and vested WBD equity awards, all of which would combine to less than $80 billion in payments to shareholders.
In total, the combined Paramount Warner company is expected to carry $80 billion in debt. Thousands of layoffs are expected at the company as CEO David Ellison has promised at least $6 billion in synergies following the completion of the merger.
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