Paramount Says Timing of Warner Bros. Deal Close ‘Not Yet Certain’ but Sets Oct. 6 Date for Stock Exchange Switch

Paramount Skydance‘s $111 billion agreement to merge with Warner Bros. Discovery is not quite a done deal, but the company is preparing for the deal to close within the next few weeks.

In an SEC filing Friday, Paramount said its board on Sept. 25 “determined to voluntarily withdraw the listing of its Class B common stock” from the Nasdaq Global Select Market, under the ticker “PSKY,” and transfer the listing to the New York Stock Exchange. The company expects that the listing and trading of the Class B Common Stock on Nasdaq will end at market close on or about Oct. 5, and that trading will begin on the NYSE at market open on or about Oct. 6.

The board set a record date of the close of business on Oct. 5 for Paramount’s previously announced distribution of warrants giving those holders the option to purchase shares of Class B Common Stock on the NYSE. Those shares would begin trading on Oct. 13.

However, Paramount noted, “the distribution of the Warrants is contingent on the closing of the previously announced acquisition by the Company of Warner Bros. Discovery” — and that currently, the WBD merger is “subject to further closing conditions, and the ultimate timing for the closing of the WBD Merger, if any, is not yet certain.”

As a result, Paramount may choose to “cancel the Record Date and/or the Issue Date or postpone the Record Date and/or the Issue Date to a later date.”

Also Friday, Warner Bros. Discovery announced that, in connection with the pending Paramount merger, WBD intends to voluntarily delist from Nasdaq its “Euro Notes” debt securities (4.302% senior notes due 2030 and 4.693% senior notes due 2033). To delist the Euro Notes, WBD expects to file a notification “on or around” Oct. 6 with the SEC.

The last hurdle for Paramount’s WBD merger was cleared this week after it reached a settlement with 12 Democratic state attorneys general. If approved by the court, it would drop the antitrust lawsuit the states had filed to block the deal. The judge in the case is still reviewing the proposed settlement, which does not require major concessions from Paramount, and has requested the parties file a response by Monday, Sept. 28, to the request by Sen. Cory Booker (D-N.J.) to launch an independent review of the proposed consent decree.

Starting Oct. 1, Paramount will being accruing a $7-million-per-day “ticking fee” payable to Warner Bros. Discovery shareholders until the merger closes.

The warrants to be issued by Paramount to PSKY shareholders are intended to provide eligible holders of its existing Class B Common Stock the opportunity to purchase shares of Class B Common Stock in a new entity “on similar terms” to those offered to the parties in the equity syndicate backing the Warner Bros. Discovery deal, including David Ellison; his father, Larry Ellison; and Gerry Cardinale, head of RedBird Capital Partners.

The company expects to issue approximately 470 million warrants on Oct. 5. Shares of Class B Common Stock held by the Paramount Global 401(k) Plan and the Paramount Global Master Trust will, in lieu of receiving warrants in the warrant distribution, receive shares of Class B Common Stock.

According to Paramount, if issued, each warrant initially will entitle the holder to purchase one share of Class B Common Stock at an initial exercise price per share equal to the average of the daily volume-weighted average price of the Class B Common Stock for 20 trading days ending on (and including) the third business day prior to the closing of the WBD merger. The purchase price for the warrants is subject to a maximum of $16.02 per share and a minimum of $12.00 per share.