Skydance Closes Warner Bros. Discovery Merger, Issues $12B Notes and 470M Warrants

What happened

Skydance Corporation disclosed in a Form 8-K filed October 13, 2026 that it completed its acquisition of Warner Bros. Discovery, Inc. on October 6, 2026. The deal was structured as a merger of Skydance subsidiary Prince Sub Inc. into Warner Bros. Discovery, which survived as a wholly owned Skydance subsidiary.

Skydance said it distributed 470,746,773 warrants on October 13, 2026 as a dividend to holders of its Class B common stock who were on the register as of an October 5 record date, at a ratio of one warrant per share. Each warrant initially entitles the holder to buy one Class B share at $12.00. The warrants were authorized for listing on the New York Stock Exchange and were expected to begin trading that day under the symbol "SKYD WS."

The company also reported the settlement of exchange and tender offers for senior notes issued by two Warner Bros. Discovery subsidiaries, Discovery Communications, LLC and Discovery Global Holdings, Inc. In the exchange offers, holders of about 99.15% of the eligible notes tendered, and Skydance issued $11,983,970,000 and 546,547,000 euros of new notes in exchange. In the separate cash tender offers, holders of about 98.83% of the eligible notes tendered, and Skydance paid $2,380,201,732.56 to buy back $2,395,448,000 in face value of the notes, plus accrued interest.

The company said it received no cash proceeds from the exchange offers because the new notes were handed to holders in return for their old ones. The Warrants and the Class B shares underlying them were registered under a shelf registration statement originally filed July 31, 2026, with a prospectus supplement filed October 5, 2026.

The price move

Skydance's Class B shares closed at $7.06 on October 13, 2026, down 23.84% from the previous close of $9.27, according to the price data. Volume was 92,200,100 shares, about 4.81 times the average volume of 19,177,013. The filing itself does not state why the shares fell, so this article cannot attribute the move to a specific cause.

The stock traded for the first time on the same day holders received one warrant per share of stock, a structure that changes what a pre-existing share represents. The filing does not address the price reaction, so it is not possible to say from these sources whether the decline reflects the warrant distribution, the closing of the merger, the new debt, or something else.

What the notes are

The notes at the center of the exchange and tender offers are corporate bonds, which are loans that investors make to a company in return for regular interest payments and repayment of principal at a set date. The percentages in each note's name, such as 6.304% or 4.875%, are the annual interest rates paid on the face amount. A $1,000 note at 6.304% pays about $63.04 a year.

The new notes are "second lien" and "secured," which means creditors holding them have a claim on substantially all of Skydance's and its guarantors' assets if the company fails to pay, but that claim ranks behind first-lien creditors. The notes carry interest rates from about 4.875% to 6.350% for the dollar-denominated series, with maturities running from 2029 to 2052. About 546.5 million euros of the notes were issued in euros, with annual rather than semiannual interest payments. The euro-denominated notes pay 5.802% (due 2030) and 5.068% (due 2033).

The exchange offers let holders swap old Warner Bros. Discovery notes for new Skydance notes with matching maturities and, with exceptions, matching interest rates. The tender offers were a straight cash buyback. Under the amended terms described in the filing, if Discovery Communications and Discovery Global Holdings do not start further "junior lien" exchange offers by March 4, 2027, they would owe holders of the affected notes a one-time cash payment of $100 per $1,000 of principal.

What this means

A Form 8-K is the current report a US public company files with the Securities and Exchange Commission to disclose material events between its quarterly and annual reports. The filing items here are 1.01 (entry into a material agreement), 2.03 (creation of a direct financial obligation), 7.01 (Regulation FD disclosure) and 8.01 (other events). The 2.03 item is triggered by the new notes, because Skydance took on a direct obligation to pay interest and principal on roughly $12.5 billion of debt.

A warrant is a security that gives its holder the right, but not the obligation, to buy a share at a set price before a set date. Skydance's warrants have an exercise price of $12.00 per Class B share and include anti-dilution adjustments. Distributing warrants as a dividend means each holder received a separate, tradable security alongside their existing shares. The holder can sell the warrant, exercise it and buy the share at $12.00, or let it expire. Skydance said the warrants would trade separately from the stock under "SKYD WS."

A tender offer, in this context, is an invitation for bondholders to sell their notes back to the company for cash. An exchange offer is the same idea, except holders receive new notes instead of cash. Both processes often require holders to consent to changes in the legal documents that govern the old bonds, which is why the filing describes supplemental indentures and consent payments.

What happens next depends on choices the filing already describes. Holders of Warrants can trade or exercise them at $12.00 per share. Discovery Communications and Discovery Global Holdings face a March 4, 2027 deadline to begin the junior lien exchange offers or pay the $100 per $1,000 cash amount. Skydance now must make semi-annual or annual interest payments on the roughly $12.5 billion of new notes it issued. The filing does not forecast stock or bond prices, and this article does not either.