Summary
Discovery Communications, Inc. (now Warner Bros. Discovery) filed this 8-K on March 11, 2013, detailing a significant secondary offering of its Series C common stock and a related stock repurchase agreement. The filing announces that FTI Ventures LLC, as the selling stockholder, will sell 8,450,000 shares of Series C common stock at a price of $64.75 per share. Notably, Discovery Communications, Inc. itself is not selling any shares and will not receive any proceeds from this offering, as it is a sale by an existing stockholder. This offering is being conducted under a shelf registration statement previously filed with the SEC. In conjunction with the stock offering, Discovery Communications, Inc. entered into a repurchase agreement with Advance Programming Holdings, LLC (APH) to buy back 4,000,000 shares of its Series C convertible preferred stock for approximately $256.4 million. This repurchase price is set at 99% of the public offering price of the common stock. The company intends to fund this repurchase with existing cash and expects to complete it in the second quarter of 2013. Investors should note that this 8-K does not reflect any changes in the company's operational performance but rather a significant change in the shareholder structure and potentially the capital structure.
Key Highlights
- 1FTI Ventures LLC is selling 8,450,000 shares of Discovery Communications' Series C common stock in a secondary offering.
- 2The public offering price for the Series C common stock is set at $64.75 per share.
- 3Discovery Communications, Inc. is not selling any shares and will not receive any proceeds from this stock offering.
- 4The company has entered into a Repurchase Agreement to buy back 4,000,000 shares of its Series C convertible preferred stock from Advance Programming Holdings, LLC (APH).
- 5The aggregate price for the stock repurchase is approximately $256.4 million ($64.1025 per share, 99% of the common stock offering price).
- 6The stock repurchase is intended to be funded by existing cash on hand and is expected to close in the second quarter of 2013.
- 7The offering and repurchase are subject to customary closing conditions.