AT&T Shares Edge Higher After Warner Brothers Discovery Deal

Shares of telecom giant AT&T saw its shares rise in the first trading session after the company completed a deal to merge its business with Discovery.

Discovery Inc. began trading on the Nasdaq under a new name and ticker symbol following the completion of its merger with AT&T’s WarnerMedia last Friday.

The new combined company, dubbed Warner Bros. Discovery, will offer a vast portfolio of content, brands and franchises across television, film and streaming, including Discovery Channel, Discovery+, Warner Bros. Entertainment, CNN, CNN+, DC, Eurosport, HBO, HBO Max, HGTV, Food Network, Investigation Discovery, TLC, TNT, TBS, truTV, Travel Channel, MotorTrend, Animal Planet, Science Channel, New Line Cinema, Cartoon Network, Adult Swim, Turner Classic Movies and others.

“With our collective assets and diversified business model, Warner Bros. Discovery offers the most differentiated and complete portfolio of content across film, television and streaming,” said Discovery CEO David Zaslav. “We are confident that we can bring more choice to consumers around the globe while fostering creativity and creating value for shareholders. I can’t wait for both teams to come together to make Warner Bros. Discovery the best place for impactful storytelling.”

Under the terms of the agreement, which was structured as a Reverse Morris Trust transaction, AT&T received $40.4 billion in cash and WarnerMedia’s retention of certain debt at Friday’s close.
AT&T shareholders received 0.241917 shares of WBD for each share of AT&T common stock they held at close.

In total, AT&T shareholders received 1.7 billion shares of WBD, representing 71% of WBD shares on a fully diluted basis. Discovery’s existing shareholders own the remainder of the new company.

AT&T CEO John Stankey said that Discovery is “well positioned to lead the transformation that’s taking place across media and entertainment, direct-to-consumer distribution and technology.”

“We look forward to seeing what the WBD team accomplishes with these industry-leading assets,” he added.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.