According to information provided by Wirtualne Media, Paramount plans to close the merger with Warner Bros. Discovery – the owner of TVN – until July 15. Publicly, CEO David Ellison declared that the realistic deadline for finalization is the end of the third quarter, no later than September 30.
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A gigantic financial operation
Banks such as Bank of America and Citigroup are already presenting financing details to investors. Currently, the issuance of approximately USD 30 billion is assumed. higher-rated bonds, $12 billion high-yield bonds and USD 7.5 billion. loans.
Paramount Skydance plans to pay $31. for a share in cash to acquire 100 percent. Warner Bros. shares Discovery. The equity in the transaction is expected to amount to approximately USD 47 billion, and the funds will come from the Ellison family, owners of Skydance, and the RedBird Capital Partners fund.
Relatively good credit rating for Warner Bros. Discovery and the limited number of new debt issues on the market favor the success of the transaction.
Simultaneously Paramount is in talks with rating agencies to maintain the group's debt at a level that allows it to maintain an investment grade rating. This is a key element that will help reduce debt servicing costs.
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The market situation favors such transactions
David Ellison, who is to take over as president of the combined group after the transaction is finalized, declared that the Ellison family is ready to support the company with additional funds if necessary to maintain an appropriate level of debt. According to S&P, this declaration was considered an informal promise to recapitalize the company.
Analysts point out that this is one of the most complex financial operations in recent years, combining elements of takeover, leveraged buyout and restructuring of existing debt.
The current market situation favors such transactions – in the US, there is a revival in the corporate debt market, and investors are looking for new issues. According to fund managers, well-priced Paramount bonds and loans should find buyers despite the scale of the project.
