AT&T, Discovery Stocks Fall 5% on News WarnerMedia Deal Will Be a Spinoff
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.