AT&T said on Tuesday it will spin off WarnerMedia in a $43 billion transaction to merge its media properties with Discovery and also cut its dividend by nearly half.
Shareholders in AT&T will own 71 per cent of the new Warner Bros Discovery company and will receive 0.24 shares of the company for each AT&T share they own. AT&T will have 7.2 billion diluted shares outstanding after the transaction closes.
The US telecoms group will pay a dividend of $1.11 per share, down from $2.08 per share. This is at the lower end of an $8bn to $9bn range AT&T had forecast earlier.
AT&T shares fell about 5 per cent at the open.
The deal to unwind AT&T's $85bn purchase of Time Warner was announced early last year, but some financial details were not disclosed until Tuesday.
“Rather than try to account for market volatility in the near term and decide where to apportion value in the process of doing an exchange of shares, the spin-off distribution will let the market do what markets do best,” AT&T chief executive John Stankey said in a prepared statement.
“We are confident both equities will soon be valued on the solid fundamentals and attractive prospects they represent.”
AT&T expects to spend about $20bn in capex this year to invest more heavily in fibre for home broadband internet services and expanding its 5G wireless footprint.
The transaction will also help reduce AT&T's heavy debt load. It ended the fourth quarter with net debt of $156.2bn, giving it a net debt to adjusted EBITDA ratio of about 3.22 times.
AT&T said it expected the debt ratio to drop to 2.5 times by the end of 2023 and that it would consider share buy-backs if the ratio is reduced further.
Warner Bros Discovery will be playing catch-up to larger streaming video rival Netflix, even though WarnerMedia's HBO Max grew faster in the US in the fourth quarter, ending the year with 74 million subscribers.
But the combination, which is expected to close in the second quarter, will be coming together right as Netflix is showing signs of maturity.
Netflix's surprisingly weak guidance for the first quarter of the year spooked investors in the media sector, sparking a sector-wide sell-off.
Disney's financial results due next week will provide another gauge of the vitality of the streaming business as analysts questions if the industrywide reorganisation to focus on streaming video will pay off in the long term.
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
Dhadak
Director: Shashank Khaitan
Starring: Janhvi Kapoor, Ishaan Khattar, Ashutosh Rana
Stars: 3
Day 4, Dubai Test: At a glance
Moment of the day Lahiru Gamage appeared to have been hard done by when he had his dismissal of Sami Aslam chalked off for a no-ball. Replays suggested he had not overstepped. No matter. Two balls later, the exact same combination – Gamage the bowler and Kusal Mendis at second slip – combined again to send Aslam back.
Stat of the day Haris Sohail took three wickets for one run in the only over he bowled, to end the Sri Lanka second innings in a hurry. That was as many as he had managed in total in his 10-year, 58-match first-class career to date. It was also the first time a bowler had taken three wickets having bowled just one over in an innings in Tests.
The verdict Just 119 more and with five wickets remaining seems like a perfectly attainable target for Pakistan. Factor in the fact the pitch is worn, is turning prodigiously, and that Sri Lanka’s seam bowlers have also been finding the strip to their liking, it is apparent the task is still a tough one. Still, though, thanks to Asad Shafiq and Sarfraz Ahmed, it is possible.
More coverage from the Future Forum
Result
6.30pm: Al Maktoum Challenge Round-3 – Group 1 (PA) $65,000 (Dirt) 2,000m; Winner: Brraq, Ryan Curatolo (jockey), Jean-Claude Pecout (trainer)
7.05pm: Handicap (TB) $65,000 (Turf) 1,800m; Winner: Bright Melody, James Doyle, Charlie Appleby
7.40pm: Meydan Classic – Listed (TB) $88,000 (T) 1,600m; Winner: Naval Crown, Mickael Barzalona, Charlie Appleby
8.15pm: Nad Al Sheba Trophy – Group 3 (TB) $195,000 (T) 2,810m; Winner: Volcanic Sky, Frankie Dettori, Saeed bin Suroor
8.50pm: Dubai Millennium Stakes – Group 3 (TB) $130,000 (T) 2,000m; Winner: Star Safari, William Buick, Charlie Appleby
9.25pm: Meydan Challenge – Listed Handicap (TB) $88,000 (T) 1,400m; Winner: Zainhom, Dane O’Neill, Musabah Al Muhairi
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The biog
Favourite book: Homegoing by Yaa Gyasi
Favourite holiday destination: Spain
Favourite film: Bohemian Rhapsody
Favourite place to visit in the UAE: The beach or Satwa
Children: Stepdaughter Tyler 27, daughter Quito 22 and son Dali 19
What's in the deal?
Agreement aims to boost trade by £25.5bn a year in the long run, compared with a total of £42.6bn in 2024
India will slash levies on medical devices, machinery, cosmetics, soft drinks and lamb.
India will also cut automotive tariffs to 10% under a quota from over 100% currently.
Indian employees in the UK will receive three years exemption from social security payments
India expects 99% of exports to benefit from zero duty, raising opportunities for textiles, marine products, footwear and jewellery
Mountain%20Boy
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David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
Three ways to limit your social media use
Clinical psychologist, Dr Saliha Afridi at The Lighthouse Arabia suggests three easy things you can do every day to cut back on the time you spend online.
1. Put the social media app in a folder on the second or third screen of your phone so it has to remain a conscious decision to open, rather than something your fingers gravitate towards without consideration.
2. Schedule a time to use social media instead of consistently throughout the day. I recommend setting aside certain times of the day or week when you upload pictures or share information.
3. Take a mental snapshot rather than a photo on your phone. Instead of sharing it with your social world, try to absorb the moment, connect with your feeling, experience the moment with all five of your senses. You will have a memory of that moment more vividly and for far longer than if you take a picture of it.
The biog
Mission to Seafarers is one of the largest port-based welfare operators in the world.
It provided services to around 200 ports across 50 countries.
They also provide port chaplains to help them deliver professional welfare services.
UAE-based players
Goodlands Riders: Jamshaid Butt, Ali Abid, JD Mahesh, Vibhor Shahi, Faizan Asif, Nadeem Rahim
Rose Hill Warriors: Faraz Sheikh, Ashok Kumar, Thabreez Ali, Janaka Chathuranga, Muzammil Afridi, Ameer Hamza
WRESTLING HIGHLIGHTS
Sholto Byrnes on Myanmar politics
Cryopreservation: A timeline
- Keyhole surgery under general anaesthetic
- Ovarian tissue surgically removed
- Tissue processed in a high-tech facility
- Tissue re-implanted at a time of the patient’s choosing
- Full hormone production regained within 4-6 months
BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
