Discovery prices any-and-all tender offer for three series of notes

By Sarah Lizee

Olympia, Wash., May 13 – Discovery, Inc. announced the pricing for its any-and-all cash tender offer for three series of notes issued by wholly owned subsidiary Discovery Communications, LLC.

As previously reported, Discovery announced cash tender offers for up to $1.5 billion of notes from nine series issued by wholly owned subsidiary Discovery Communications and its wholly owned subsidiary, Scripps Networks Interactive, Inc.

Discovery Communications is tendering for any and all of three series of outstanding senior notes, and Discovery Communications and Scripps are offering to purchase senior notes from six series under a waterfall offer.

The maximum tender amount is $1.5 billion less the aggregate principal amount of notes tendered and accepted for purchase in the any-and-all offer.

Any-and-all offer

The any-and-all offer will expire at 5 p.m. ET on May 13.

Discovery Communications is offering to purchase any and all of its following outstanding notes:

• $640 million 4.375% senior notes due 2021 (Cusip: 25470DAE9), with pricing based on the 0.125% U.S. Treasury due April 30, 2022 and a fixed spread of 100 basis points for a total consideration of $1,034.21 per $1,000 of notes;

• $496 million 3.3% senior notes due 2022 (Cusip: 25470DAF6), with pricing based on the 0.125% U.S. Treasury due April 30, 2022 and a fixed spread of 110 bps for a total consideration of $1,039.94 per $1,000 of notes; and

• $345,894,000 3.5% senior notes due 2022 (Cusip: 25470DBA6), with pricing based on the 0.125% U.S. Treasury due April 30, 2022 and a fixed spread of 110 bps for a total consideration of $1,042.05 per $1,000 of notes.

Pricing was determined at 2 p.m. ET on May 13.

The companies will also pay accrued interest to but excluding the settlement date, which is expected to be May 18.

Tenders may no longer be withdrawn under the any-and-all offer.

Waterfall offer

The waterfall offer will expire at midnight ET on June 4.

Discovery Communications and Scripps are offering to purchase the following outstanding notes, listed in order of acceptance priority level:

• $54,088,000 3.5% senior notes due 2022 issued by Scripps (Cusip: 811065AF8), with pricing based on the 0.125% U.S. Treasury due April 30, 2022 and a fixed spread of 110 bps;

• $350 million 3.25% senior notes due 2023 issued by Discovery Communications (Cusip: 25470DAH2), with pricing based on the 0.25% U.S. Treasury due April 15, 2023 and a fixed spread of 120 bps;

• $1,166,773,000 2.95% senior notes due 2023 issued by Discovery Communications (Cusip: 25470DAQ2), with pricing based on the 0.25% U.S. Treasury due April 15, 2023 and a fixed spread of 110 bps;

• $450 million 3.8% senior notes due 2024 issued by Discovery Communications (Cusip: 25470DAM1), with pricing based on the 0.375% U.S. Treasury due April 30, 2025 and a fixed spread of 155 bps;

• $11.92 million 3.9% senior notes due 2024 issued by Scripps (Cusip: 811065AC5), with pricing based on the 0.375% U.S. Treasury due April 30, 2025 and a fixed spread of 175 bps; and

• $486,215,000 3.9% senior notes due 2024 issued by Discovery Communications (Cusip: 25470DBC2), with pricing based on the 0.375% U.S. Treasury due April 30, 2025 and a fixed spread of 175 bps.

The total consideration includes an early tender premium of $50 per $1,000 principal amount of notes tendered at or prior to 5 p.m. ET on May 20, the waterfall early tender deadline.

Holders tendering notes after the early deadline will only be eligible to receive the tender offer consideration, or the total consideration less the early tender premium.

The total consideration will be determined at 10 a.m. ET on May 21.

The companies will also pay accrued interest to but excluding the applicable settlement date, which is expected to be May 22 for early tendered notes and June 8 for any remaining tendered notes accepted for purchase.

Notes will be accepted for purchase according to acceptance priority level. However, notes tendered before the early tender deadline will be accepted for purchase in priority to notes tendered after the early deadline, even if those notes tendered later have a higher acceptance priority level than those tendered earlier.

Notes of a series may be subject to proration if tenders exceed the waterfall offer cap.

If the waterfall offer is fully subscribed as of the early tender deadline, notes tendered after the early deadline will not be accepted for purchase.

Tenders may be withdrawn under the waterfall offer at any time at or before 5 p.m. ET on May 20.

Both tender offers are subject to a financing condition.

J.P. Morgan Securities LLC (212 834-3424 or 866 834-4666), RBC Capital Markets, LLC (212 618-7843 or 877 381-2099) and Goldman Sachs & Co. LLC (212 357-1452 or 800 828-3182) are dealer managers for the tender offers.

D.F. King & Co., Inc. (866 864-7964 or 212 269-5550 for banks and brokers; disca@dfking.com; www.dfking.com/discovery) is the information and tender agent.

The global media company is based in Silver Spring, Md.

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