AT&T Announces Details for Completion of Spin-Off Ahead of Close of WarnerMedia Transaction
AT&T expects to close the transaction in April, second quarter dividend on common stock, payable in May, has been set according to previously announced updated dividend policy
DALLAS, March 25, 2022 — Today AT&T Inc.* (NYSE:T) announced that it has declared a stock dividend to effect the spin-off of 100% of AT&T’s interest in WarnerMedia to AT&T’s shareholders. The record date for the stock dividend is the close of business on April 5, 2022. This stock dividend is in connection with the previously announced transaction to combine AT&T’s WarnerMedia business with Discovery, Inc. (NASDAQ: DISCA, DISCB, DISCK). On the closing date of the transaction, anticipated to be in April, AT&T shareholders will receive, on a tax-free basis, an estimated 0.24 shares of stock in Warner Bros. Discovery, Inc. (WBD) for each share of AT&T common stock.
AT&T shareholders as of the stock dividend record date will be entitled to receive shares of WarnerMedia Spinco common stock, representing 100% of AT&T’s interest in WarnerMedia. Immediately following this spin-off, the WarnerMedia Spinco shares will be exchanged for stock representing approximately 71% of the new WBD on a fully diluted basis. The exact number of shares of WBD common stock to be received by AT&T shareholders for each AT&T common stock will be determined immediately before the closing based on the number of shares of AT&T common stock outstanding and the number of shares of Discovery common stock outstanding on an as-converted and as-exercised basis.
AT&T shareholders do not need to take any action. Their WarnerMedia Spinco shares will automatically be exchanged for WBD common stock in the merger, which will occur on the closing date of the transaction. Following the close of the transaction, AT&T shareholders will continue to hold, along with their new shares of WBD common stock, the same number of shares of AT&T common stock they held immediately prior to close. After close, investors should expect that AT&T’s share price will adjust to reflect the transfer of the WarnerMedia business to the newly formed Warner Bros. Discovery entity.
Factors that May Affect the Timing of the Spin-Off
The timing of the spin-off is subject to the satisfaction or waver of the closing conditions for the transaction. If certain closing conditions are not satisfied or waived in advance of April 5, AT&T may elect to change the stock dividend record date to a later date.
AT&T Declares Dividends on Common and Preferred Stock
With the close of the pending WarnerMedia transaction expected in April, the AT&T board of directors today also declared a second quarter dividend of $0.2775 per share on the company’s common stock. While future dividends remain subject to board approval, this amount is consistent with AT&T’s previous announcement that the board had approved an expected post-close annual common dividend of $1.11 per share. At the updated rate, AT&T’s stock remains among the best dividend-yielding stocks in the United States and in the Fortune 500.
Additionally, the board of directors declared quarterly dividends on the company’s 5.000% Perpetual Preferred Stock, Series A, and the company’s 4.750% Perpetual Preferred Stock, Series C. The Series A dividend is $312.50 per preferred share, or $0.3125 per depositary share. The Series C dividend is $296.875 per preferred share, or $0.296875 per depositary share.
Dividends on the common stock and Series A and Series C preferred stock are payable on May 2, 2022, to shareholders of record of the respective shares at the close of business on April 14, 2022.
The board of directors also declared an annual dividend on the company’s Fixed Rate Reset Perpetual Preferred Stock, Series B, of €2,875.00 per preferred share. Dividends on the Series B preferred stock are payable on May 3, 2022, to shareholders of record as of the close of business on April 14, 2022.
Two-Way Trading for AT&T Stock Expected to Begin on April 4
AT&T has been advised by the New York Stock Exchange (the NYSE) that beginning on the trading day immediately prior to the April 5 record date for the spin-off distribution (currently April 4) and continuing through the close of trading on the business day before the closing date of the merger,1 There will be two markets in AT&T common stock on the NYSE: a “regular way” market and an “ex-distribution” market. During this period of two-way trading in AT&T common stock, there will also be a market on the Nasdaq for WBD common stock on a “when issued” (“WI”) basis.
The trading options that will be available during the two-way trading period are:
AT&T Regular Way Trading
If, during the period of two-way trading, an AT&T shareholder sells a share of AT&T common stock in the regular way market under AT&T’s NYSE symbol, “T,” the shareholder will be selling both the share of AT&T common stock and the right to receive shares of WBD common stock in the transaction.
AT&T Ex-distribution Trading
If, during the period of two-way trading, an AT&T shareholder sells a share of AT&T common stock in the ex-distribution market under the temporary NYSE symbol “T WD,” the AT&T shareholder will be selling only a share of AT&T common stock and will retain the right to receive shares of WBD common stock in the transaction.
During the two-way trading period, an AT&T shareholder also has the option of selling the right to receive shares of WBD common stock while retaining shares of AT&T common stock. This option will be available under the temporary Nasdaq symbol “WBDWV”.
Trades under the symbols “T WD” and “WBDWV” will settle after the closing date of the WarnerMedia-Discovery transaction. If the transaction is not completed, all trades made under these temporary symbols will be canceled.
In all cases, investors should consult with their financial and tax advisors regarding the specific implications of selling shares of their AT&T common stock or the right to receive shares of WBD common stock on or before the closing date of the WarnerMedia-Discovery transaction.
Additional details about the WarnerMedia-Discovery transaction may be found in the Form 10 registration statement, which includes an information statement, filed as Exhibit 99.1, by the WarnerMedia Spinco entity, Magallanes, Inc., which is available at http://www. sec.gov.