SILVER SPRING, Md.,
Sept. 16, 2020 /PRNewswire/
-- Discovery, Inc. ("Discovery") (Nasdaq: DISCA, DISCB, DISCK)
today announced the pricing terms of its previously announced
transaction to purchase five series of outstanding senior notes
issued by its wholly owned subsidiary, Discovery Communications,
LLC ("DCL"). The cash tender transaction consists of five separate
offers by Discovery, DCL and Discovery's indirect wholly owned
subsidiary Scripps Networks Interactive, Inc. ("Scripps" and
together with DCL and Discovery, the "Offerors") to purchase for
cash (each, a "Cash Offer," and collectively, the "Cash Offers")
any and all of the outstanding notes listed in the table below
(collectively, the "Notes"), on the terms and subject to the
conditions set forth in the Offer to Purchase dated September 10, 2020 (the "Offer to Purchase" and,
together with the certification of eligibility to participate in
the Cash Offers, the instructions for such certification and the
notice of guaranteed delivery, the "Cash Offer Documents").
The Offerors' obligation to complete a Cash Offer with respect
to a particular series of Notes is conditioned on the aggregate
Tender Consideration (as defined in the Cash Offer Documents) for
the Cash Offers (which excludes the applicable Accrued Coupon
Payment (as defined below)) not exceeding $80 million (the "Maximum Tender Amount") and is
subject to the other conditions set forth below.
The Cash Offers will expire at 5:00
p.m., New York City time
today, September 16, 2020 (such date
and time, as may be extended or earlier terminated by the Offerors,
the "Cash Offer Expiration Date"). The "Cash Offer Settlement Date"
will be promptly following the Cash Offer Expiration Date and is
expected to be September 21,
2020.
Only holders who are not "qualified institutional buyers" and
who are not non-U.S. persons (other than "retail investors" in the
European Economic Area or in the United
Kingdom and investors in any province or territory of
Canada that are individuals or
that are institutions or other entities that do not qualify as both
"accredited investors" and "permitted clients") are eligible to
participate in this transaction, as more fully described below.
Discovery also announced today the pricing terms of its transaction
to exchange any and all of such five series of notes pursuant to
private exchange offers (each, an "Exchange Offer" and
collectively, the "Exchange Offers"), which are open only to
Ineligible Holders (as defined below).
The following table sets forth, for each series of Notes, the
yields and the Tender Consideration for each $1,000 principal amount of such Notes validly
tendered and not validly withdrawn prior to the Cash Offer
Expiration Date and accepted by the Offerors:
Title of Series of
Notes to be
Purchased
|
CUSIP
Number/ISIN
|
Acceptance
Priority
Level(1)
|
Reference
U.S.
Treasury
Security
|
Reference
Yield(2)
|
Fixed
Spread
(basis
points)
|
Yield(3)
|
Tender
Consideration
|
5.000% Senior Notes
due 2037
("2037
Notes")
|
25470D AS8
US25470DAS80
|
1
|
1.25% due May
15,
2050
|
1.423%
|
190
|
3.323%
|
$1,211.66
|
6.350% Senior Notes
due 2040
("2040
Notes")
|
25470DAD1
US25470DAD12
|
2
|
1.25% due May
15,
2050
|
1.423%
|
225
|
3.673%
|
$1,372.87
|
5.200% Senior Notes
due 2047
("2047
Notes")
|
25470D AT6
US25470DAT63
|
3
|
1.25% due May
15,
2050
|
1.423%
|
235
|
3.773%
|
$1,237.74
|
4.950% Senior Notes
due 2042
("2042
Notes")
|
25470D AG4
US25470DAG43
|
4
|
1.25% due May
15,
2050
|
1.423%
|
230
|
3.723%
|
$1,181.23
|
4.875% Senior Notes
due 2043
("2043
Notes")
|
25470D AJ8
US25470DAJ81
|
5
|
1.25% due May
15,
2050
|
1.423%
|
230
|
3.723%
|
$1,174.62
|
|
(1) The Offerors will
accept Notes for purchase in the order of their respective
Acceptance Priority Level specified in the table above (each, an
"Acceptance Priority Level," with 1 being the highest Acceptance
Priority Level and 5 being the lowest Acceptance Priority Level),
subject to the Aggregate Maximum Cash Offer Condition and the other
terms and conditions described in the Offer to Purchase. It is
possible that the Aggregate Maximum Cash Offer Condition might not
be met with respect to a series of Notes and such series of Notes
will not be accepted for purchase, even if one or more series of
Notes with a lower Acceptance Priority Level is accepted for
purchase. The Offerors reserve the right, but are not obligated, to
increase the Maximum Tender Amount, in their sole and absolute
discretion, without extending the Withdrawal Deadline or otherwise
reinstating withdrawal rights, except as required by applicable
law.
|
|
(2) Represents the
bid-side yield on the Reference U.S. Treasury Security calculated
as of 11:00 a.m., New York City time, on September 16, 2020, in
accordance with the procedures set forth in the Offer to
Purchase.
|
|
(3) Represents the
bid-side yield on the Reference U.S. Treasury Security plus the
applicable Fixed Spread, calculated in accordance with the
procedures set forth in the Offer to Purchase.
|
|
(4) Determined taking
into account the par call date, where applicable, for such series
of Notes.
|
Upon the terms and subject to the conditions set forth in the
Cash Offer Documents, Eligible Holders (as defined below) who (i)
validly tender and who do not validly withdraw Notes at or prior to
the Cash Offer Expiration Date or (ii) deliver a properly completed
and duly executed notice of guaranteed delivery and all other
required documents at or prior to the Cash Offer Expiration Date
and tender their Notes pursuant to the Cash Offers at or prior to
5:00 p.m., New York City time, on the second business day
after the applicable Cash Offer Expiration Date pursuant to
guaranteed delivery procedures, expected to be September 18, 2020, subject in each case to the
delivery of the certification to participate in the Cash Offers and
tendering the applicable minimum denominations, and whose Notes are
accepted for purchase by Discovery, will receive consideration in
the Cash Offers equal to the applicable Tender Consideration.
The Offerors intend to pay in cash accrued and unpaid interest
on the Notes accepted for purchase from the last applicable
interest payment date to, but excluding, the Cash Offer Settlement
Date (the "Accrued Coupon Payment"). Interest will cease to accrue
on the Cash Offer Settlement Date for all Notes accepted in the
Cash Offers, including those tendered pursuant to the Guaranteed
Delivery Procedures. The last interest payment dates for the Notes
are expected to be September 20, 2020
for the 2037 Notes and the 2047 Notes, June
1, 2020 for the 2040 Notes, May 15,
2020 for the 2042 Notes and April 1,
2020 for the 2043 Notes. For the avoidance of doubt, the
interest payment payable with respect to the September 20, 2020 interest payment for the 2037
Notes and the 2047 Notes will be paid to record holders of the 2037
Notes and 2047 Notes as of September 5,
2020 and thus will not be included in the calculation of the
Accrued Coupon Payment payable on the 2037 Notes or the 2047
Notes.
The complete terms and conditions of the Cash Offers are set
forth in the Cash Offer Documents, each of which have been
distributed to Eligible Holders in connection with the proposed
Cash Offers. Each Cash Offer is subject to certain conditions,
including (i) certain customary conditions, including that we will
not be obligated to consummate the Cash Offers upon the occurrence
of an event or events or the likely occurrence of an event or
events that would or might reasonably be expected to prohibit,
restrict or delay the consummation of the Cash Offers or materially
impair the contemplated benefits to us of the Cash Offer, (ii) that
the aggregate principal amount of cash payable by the Offerors to
Eligible Holders participating in the Cash Offers is no greater
than $80 million before giving effect
to the Accrued Coupon Payment (the "Aggregate Maximum Cash Offer
Condition") and (iii) the timely satisfaction or waiver of all of
the conditions precedent to the completion of the corresponding
Exchange Offer for such series of Notes (with respect to each
Exchange Offer, the "Exchange Offer Completion Condition"). The
Exchange Offers are subject to certain conditions, including (i)
that the aggregate total exchange consideration (which excludes the
Accrued Coupon Payment) shall not exceed $2.1 billion (the "Maximum Exchange Consideration
Condition") and (ii) that the aggregate principal amount of New
Notes to be issued under the Exchange Offers must be equal to or
greater than $500 million (the
"Minimum Issue Condition").
The Offerors will terminate a Cash Offer for a given series of
Notes if they terminate the Exchange Offer for such series of
Notes, and the Offerors will terminate the Exchange Offer for a
given series of Notes if they terminate the Cash Offer for such
series of Notes. The Exchange Offer Completion Condition may not be
waived by the Offerors; however, the Offerors reserve the right, in
their sole discretion, to waive the other conditions, including the
Aggregate Maximum Cash Offer Condition, the Maximum Exchange
Consideration Condition and the Minimum Condition Requirement. If
the Aggregate Maximum Cash Offer Condition is not satisfied or
waived, the Offerors will terminate the applicable Cash Offers and
the Exchange Offers.
If the Aggregate Maximum Cash Offer Condition is not satisfied
or waived for every series of Notes, then the Offerors will, in
accordance with the Acceptance Priority Levels, accept for purchase
all Notes of each series validly tendered and not validly
withdrawn, so long as (1) the aggregate cash payable by us to
Eligible Holders of Notes of such series participating in the Cash
Offers (which excludes the aggregate Accrued Coupon Payment) is no
greater than the Maximum Tender Amount for all validly tendered and
not validly withdrawn Notes of such series, plus (2) the aggregate
cash payable by us to Eligible Holders participating in the Cash
Offers for all validly tendered and not validly withdrawn Notes of
all series having a higher Acceptance Priority Level than such
series of Notes is equal to, or less than, the Maximum Tender
Amount, subject to the condition with respect to Non-Covered Notes
further described below.
It is possible that a series of Notes with a particular
Acceptance Priority Level will fail to meet the Aggregate Maximum
Cash Offer Condition or another condition set forth in this Offer
to Purchase and therefore will not be accepted for purchase even if
one or more series with a lower Acceptance Priority Level is
accepted for purchase. If any series of Notes is accepted for
purchase under the Cash Offers, all Notes of that series that are
validly tendered and not validly withdrawn will be accepted for
purchase.
Only holders of Notes who are not (i) "qualified institutional
buyers" within the meaning of Rule 144A under the Securities Act of
1933, as amended (the "Securities Act"), and who are not (ii)
non-U.S. persons (as defined in Rule 902 under the Securities Act)
located outside of the United
States within the meaning of Regulation S under the
Securities Act, other than "retail investors" (as defined below) in
the European Economic Area or the United
Kingdom, are eligible to participate in the Cash Offers. For
these purposes, a retail investor means a person who is one (or
more) of: (i) a retail client as defined in point (11) of Article
4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or (ii) a
customer within the meaning of Directive 2002/92/EC (as amended,
the "Insurance Mediation Directive"), where that customer would not
qualify as a professional client as defined in point (10) of
Article 4(1) of MiFID II; or (iii) not a qualified investor as
defined in Regulation (EU) 2017/1129 (as amended, the "Prospectus
Regulation"). Holders of Notes located or resident in a province or
territory of Canada will only be
eligible to participate in the Cash Offers if they are (i)
individuals; or (ii) institutions or other entities that do not
qualify as both "accredited investors," as such term is defined in
National Instrument 45-106 - Prospectus Exemptions ("NI 45-106") of
the Canadian Securities Administrators or Section 73.3(1) of the
Securities Act (Ontario), and
"permitted clients," as such term is defined in National Instrument
31-103 - Registration Requirements, Exemptions and Ongoing
Registrant Obligations ("NI 31-103") of the Canadian Securities
Administrators. The Offerors refer to holders who meet the
foregoing criteria in this paragraph as "Eligible Holders." The
Offerors refer to holders of Notes who are not Eligible Holders as
"Ineligible Holders."
Only Eligible Holders who have delivered a certification to
D.F. King & Co., Inc., the tender agent, certifying that they
are Eligible Holders, will be authorized to participate in the Cash
Offers.
Holders are advised to check with any bank, securities broker
or other intermediary through which they hold Notes as to when such
intermediary needs to receive instructions from a holder in order
for that holder to be able to participate in, or (in the
circumstances in which revocation is permitted) revoke their
instruction to participate in the Cash Offers before the deadlines
specified herein and in the Cash Offer Documents. The deadlines set
by each clearing system for the submission and withdrawal of tender
instructions will also be earlier than the relevant deadlines
specified herein and in the Cash Offer Documents.
The information agent and tender agent is D.F. King & Co.,
Inc. Copies of the Offer to Purchase and related offering materials
are available by contacting D.F. King & Co., Inc. at (800)
431-9646 (U.S. toll-free) or (212) 269-5550 (banks and brokers),
via email at disca@dfking.com or online at
www.dfking.com/discovery.
Deutsche Bank Securities Inc. and RBC Capital Markets, LLC are
acting as the joint lead dealer managers for the Cash Offers.
Questions regarding the Cash Offers should be directed to Deutsche
Bank Securities Inc. at (212) 250-2955 or (866) 627-0391
(toll-free) and RBC Capital Markets, LLC at (212) 618-7843 or (877)
381-2099 (toll-free).
The Cash Offer Documents can be accessed at the following link:
www.dfking.com/discovery.
This press release is not an offer to sell or a solicitation to
buy any of the securities described herein. The Cash Offers are
being made solely by the Cash Offer Documents and only to such
persons and in such jurisdictions as is permitted under applicable
law.
About Discovery
Discovery is a global leader in real life entertainment, serving
a passionate audience of superfans around the world with content
that inspires, informs and entertains. Discovery delivers over
8,000 hours of original programming each year and has category
leadership across deeply loved content genres around the world.
Available in 220 countries and territories and in nearly 50
languages, Discovery is a platform innovator, reaching viewers on
all screens, including TV Everywhere products such as the GO
portfolio of apps; direct-to-consumer streaming services such as
Eurosport Player, Food Network Kitchen and MotorTrend OnDemand;
digital-first and social content from Group Nine Media; a landmark
natural history and factual content partnership with the BBC; and a
strategic alliance with PGA TOUR to create the international home
of golf. Discovery's portfolio of premium brands includes Discovery
Channel, HGTV, Food Network, TLC, Investigation Discovery, Travel
Channel, MotorTrend, Animal Planet, Science Channel, and the
forthcoming multi-platform JV with Chip and
Joanna Gaines, Magnolia, as well as OWN: Oprah Winfrey
Network in the U.S., Discovery Kids in Latin America, and Eurosport, the leading
provider of locally relevant, premium sports and Home of the
Olympic Games across Europe.
Cautionary Statement Concerning Forward-looking
Statements
This press release contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are based on current
expectations, forecasts and assumptions that involve risks and
uncertainties and on information available to Discovery as of the
date hereof. The Discovery's actual results could differ materially
from those stated or implied, due to risks and uncertainties
associated with its business, which include the risks related to
the acceptance of any tendered Notes, the expiration and settlement
of the Cash Offers, the satisfaction of conditions to the Cash
Offers, whether the Cash Offers will be consummated in accordance
with the terms set forth in the Offer to Purchase or at all and the
timing of any of the foregoing, as well as the risk factors
disclosed in its Annual Report on Form 10-K filed with the SEC on
February 27, 2020 and in Discovery's
Quarterly Reports on Form 10-Q filed with the SEC on May 6, 2020 and August 5,
2020. Forward-looking statements in this release include,
without limitation, statements regarding Discovery's expectations,
beliefs, intentions or strategies regarding the future, and can be
identified by forward-looking words such as "anticipate,"
"believe," "could," "continue," "estimate," "expect," "intend,"
"may," "should," "will" and "would" or similar words.
Discovery expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statement contained herein to reflect any change in the Discovery's
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is
based.
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SOURCE Discovery, Inc.