AT&T Sets Plan to Spin Off WarnerMedia in $43 Billion Deal

variety.com:

Todd Spangler NY Digital EditorAT&T announced that its board has decided to spin off the telco’s interest in WarnerMedia — rather than structure the media conglom’s divestiture as a split-off.The transaction will spin off 100% of AT&T’s interest in WarnerMedia to AT&T’s existing shareholders in a pro-rata distribution, followed by the merger of WarnerMedia with Discovery to form a new company, “Warner Bros.

Discovery.” The deal is expected to close in the second quarter of 2022; previously, AT&T had targeted “mid-2022” for the close.Last week, on AT&T’s Q4 earnings call, CEO John Stankey had left said the board was still on the fence about whether to spin off WarnerMedia (and give AT&T shareholders pro-rata shares in the new Warner Bros.

Discovery) or do a split-off (in which they would have the option to exchange AT&T shares for stock in WarnerMedia-Discovery).

Stankey told analysts on the Q4 earnings call that were “pros and cons to going either with a spin or a split.” A split-off would have essentially amounted to a large stock buyback by AT&T.