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.
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TOURNAMENT INFO
Women’s World Twenty20 Qualifier
Jul 3- 14, in the Netherlands
The top two teams will qualify to play at the World T20 in the West Indies in November
UAE squad
Humaira Tasneem (captain), Chamani Seneviratne, Subha Srinivasan, Neha Sharma, Kavisha Kumari, Judit Cleetus, Chaya Mughal, Roopa Nagraj, Heena Hotchandani, Namita D’Souza, Ishani Senevirathne, Esha Oza, Nisha Ali, Udeni Kuruppuarachchi
Ipaf in numbers
Established: 2008
Prize money: $50,000 (Dh183,650) for winners and $10,000 for those on the shortlist.
Winning novels: 13
Shortlisted novels: 66
Longlisted novels: 111
Total number of novels submitted: 1,780
Novels translated internationally: 66
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
Juliot Vinolia’s checklist for adopting alternate-day fasting
- Don’t do it more than once in three days
- Don’t go under 700 calories on fasting days
- Ensure there is sufficient water intake, as the body can go in dehydration mode
- Ensure there is enough roughage (fibre) in the food on fasting days as well
- Do not binge on processed or fatty foods on non-fasting days
- Complement fasting with plant-based foods, fruits, vegetables, seafood. Cut out processed meats and processed carbohydrates
- Manage your sleep
- People with existing gastric or mental health issues should avoid fasting
- Do not fast for prolonged periods without supervision by a qualified expert
THE BIO
Favourite book: ‘Purpose Driven Life’ by Rick Warren
Favourite travel destination: Switzerland
Hobbies: Travelling and following motivational speeches and speakers
Favourite place in UAE: Dubai Museum
Coming 2 America
Directed by: Craig Brewer
Starring: Eddie Murphy, Arsenio Hall, Jermaine Fowler, Leslie Jones
3/5 stars
