Paramount Sets Oct. 5 Date for Warrants Tied to WBD Merger

Paramount Skydance has penciled in Oct. 5 to issue roughly 470 million warrants to PSKY shareholders tied to its $111 billion merger with Warner Bros. Discovery — while warning that the deal's closing date remains “not yet certain.”

In an SEC filing on Friday, Paramount said its board decided on Sept. 25 to “voluntarily withdraw the listing of its Class B common stock” from the Nasdaq Global Select Market, where it trades under the ticker “PSKY,” and transfer the listing to the New York Stock Exchange. The company expects Nasdaq trading to end at market close on or about Oct. 5, with trading beginning 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 the previously announced warrant distribution. Shares purchased through those warrants would begin trading on Oct. 13.

But Paramount attached a significant caveat. “The distribution of the Warrants is contingent on the closing of the previously announced acquisition by the Company of Warner Bros. Discovery,” the company stated, adding that the 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 said it may “cancel the Record Date and/or the Issue Date or postpone the Record Date and/or the Issue Date to a later date.”

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

The merger cleared its final regulatory hurdle this week when Paramount reached a settlement with 12 Democratic state attorneys general. If the court approves, the states would drop the antitrust lawsuit they filed to block the deal. The settlement does not require major concessions from Paramount.

The presiding judge is still reviewing the proposed agreement and has asked the parties to respond by Monday, Sept. 28, to a request from Sen. Cory Booker (D-N.J.) for an independent review of the proposed consent decree.

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

The warrants are designed to give eligible holders of Paramount's existing Class B common stock the chance to buy shares in the new entity “on similar terms” to those offered to the equity syndicate backing the deal. That syndicate includes David Ellison; his father, Larry Ellison; and Gerry Cardinale, head of RedBird Capital Partners.

Shares held by the Paramount Global 401(k) Plan and the Paramount Global Master Trust will not receive warrants. Instead, they will receive shares of Class B common stock directly.

According to Paramount, each warrant, if issued, would initially entitle the holder to purchase one share of Class B common stock at an exercise price equal to the average daily volume-weighted average price of the stock over the 20 trading days ending on, and including, the third business day before the merger closes. The exercise price is capped at a maximum of $16.02 per share and floored at a minimum of $12.00 per share.

If the judge signs off on the settlement and the remaining conditions are met, the Oct. 5 dates could hold — and every day of delay beyond Oct. 1 now carries a concrete, seven-figure cost.