Paramount Skydance declares warrant dividend for Class B holders in Warner Bros. Discovery deal

Paramount Skydance Corporation declared a warrant distribution to eligible holders of its Class B Common Stock in connection with its acquisition of Warner Bros. Discovery, Inc. The board of directors declared the distribution, which was recommended by a special committee advised by independent financial and legal advisors. The company initially disclosed its intention to distribute the warrants on April 7, 2026, alongside the announcement of an equity syndication involving the Lawrence J. Ellison Revocable Trust, Lawrence J. Ellison, and RedBird Capital Partners Fund IV (Master), L.P.

Eligible holders of record as of October 5, 2026, will receive one warrant for each share of Class B Common Stock held, rounded down to the nearest whole warrant. The distribution is a dividend of warrants that requires no payment or action from shareholders. Paramount Skydance expects to issue the warrants on or about October 13, 2026, with an ex-dividend date expected on or about October 14, 2026. The warrants are designed to give holders the right, but not the obligation, to purchase additional shares of Class B Common Stock at a specified exercise price before expiration.

The distribution is contingent on the closing of the acquisition of Warner Bros. Discovery. Because the acquisition is subject to further closing conditions and the ultimate timing remains uncertain, Paramount Skydance may cancel or postpone the record date and issue date at its discretion. If such changes occur, the company will issue a public announcement complying with exchange rules. The warrants are expected to be listed on the New York Stock Exchange around the issue date, allowing holders to potentially sell them or hold for future appreciation in the value of the underlying stock.

Specific groups are excluded from receiving warrants. Lawrence J. Ellison, David F. Ellison, Gerald J. Cardinale, the Lawrence J. Ellison Revocable Trust, RedBird Capital Partners Fund IV (Master), L.P., and their affiliates are designated as restricted holders and will not receive warrants for shares they beneficially own. Direct or indirect subsidiaries of Paramount Skydance holding Class B Common Stock as of the record date are also excluded. Additionally, participants in the Paramount Global 401(k) Plan’s company stock fund are subject to separate arrangements and will not receive or exercise warrants for those shares.

The warrants expire at 5:00 p.m., New York City time, on the tenth anniversary of the issue date, subject to early expiration provisions. The distribution itself is not dilutive because warrants do not convert into shares unless exercised. However, ownership interests may be diluted if warrant holders exercise their rights. If exercised, the company would receive cash proceeds, which management currently expects to use for general corporate purposes.