8-KMaterial AgreementsExhibits & Filings

Warner Bros. Discovery, Inc. 8-K Report, Material Agreement (May 22, 2014)

Filed May 22, 2014For Securities:WBD

Summary

Warner Bros. Discovery, Inc. (WBD), then operating as Discovery Communications, Inc., filed an 8-K on May 22, 2014, to disclose a material definitive agreement. The company entered into a share repurchase agreement with Advance/Newhouse Programming Partnership (ANPP), a significant shareholder. This agreement outlines a quarterly repurchase of ANPP's Series C convertible preferred stock. The repurchase is designed to maintain ANPP's ownership percentage in the company as Discovery Communications executes its existing share repurchase program for its Series C common stock. The terms stipulate that Discovery Communications will repurchase a specific proportion of Series C Preferred Stock from ANPP, calculated based on a fraction (3/7) of the Series C Common Stock repurchased from the open market in the preceding quarter. The repurchase price will be at a discount (99%) to the average price paid for common stock repurchases, adjusted by the conversion rate. This agreement introduces a structured mechanism for managing ANPP's stake while the company actively reduces its outstanding common stock.

Key Highlights

  • 1Discovery Communications entered into a share repurchase agreement with Advance/Newhouse Programming Partnership (ANPP).
  • 2The agreement mandates quarterly repurchases of ANPP's Series C convertible preferred stock.
  • 3The repurchases are intended to maintain ANPP's ownership percentage in the company.
  • 4The repurchase amount is tied to Discovery's existing common stock repurchase program (3/7 of repurchased common shares).
  • 5The purchase price for the preferred stock will be 99% of the average repurchase price of common stock, adjusted for the conversion rate.
  • 6The agreement includes several termination clauses, such as the expiration of the common stock repurchase program, major corporate transactions, ANPP insolvency, or mutual termination notices.
  • 7This agreement is separate from and does not obligate the company to repurchase its common stock.

Frequently Asked Questions

The primary purpose is to allow Discovery Communications to repurchase shares of ANPP's Series C convertible preferred stock on a quarterly basis. This is structured in a way that aims to maintain ANPP's proportional ownership in the company as Discovery Communications reduces its outstanding Series C common stock through its existing repurchase program.

The purchase price per share of Series C Preferred Stock will be 99% of the average price per share of Series C Common Stock that the Company repurchased during the applicable fiscal quarter, multiplied by the applicable Series C conversion rate. This means ANPP effectively sells its preferred shares at a slight discount to the market prices of the common shares.

The agreement can be terminated under several conditions, including: after the first repurchase following the termination or expiration of the Company's general share repurchase program, upon public announcement of a tender offer or merger, if ANPP becomes insolvent or subject to bankruptcy proceedings, if the Company issues a termination notice, or if ANPP issues a termination notice.

No, the agreement explicitly states that it does not obligate the Company to repurchase any shares of its common stock under its existing Share Repurchase Program. The repurchases of Series C Preferred Stock from ANPP are handled separately from the ongoing common stock repurchase activities.