Shares in both AT&T and Discovery opened down about 5% apiece on Tuesday morning, following news that AT&T would indeed, definitely spinoff WarnerMedia in a $43 billion deal with Discovery, Inc.There was previously a chance the two companies would execute a split instead.In addition to that decision, AT&T’s board of directors has approved an annual dividend of $1.11 per AT&T share.“In evaluating the form of distribution, we were guided by one objective — executing the transaction in the most seamless manner possible to support long-term value generation,” AT&T CEO John Stankey said this morning. “We are confident the spin-off achieves that objective because it’s simple, efficient and results in AT&T shareholders owning shares of both companies, each of which will have the ability to drive better returns in a manner consistent with their respective market opportunities.“We believe that the remaining AT&T and the new WBD are two equities that the market will want to own and the markets to support those equities will develop,” Stankey continued. “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.
We are confident both equities will soon be valued on the solid fundamentals and attractive prospects they represent.”That WBD refers to Warner Bros.
Discovery’s expected stock-ticker symbol. Shares will trade on the NASDAQ Global Select Market.The close of the pending deal will create a new, combined company, ending Discovery, Inc.’s run as a standalone entity.
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