13:53 PDT 22/02/2021
by
Alex Weprin
The sale of Class B ordinary shares and Series A convertible preference shares will take place in the same month as the Paramount + was officially launched and as the company’s share price rises.
ViacomCBS is looking for new cash to boost its congestion. The company said on Monday that it would need $ 2 billion in Class B ordinary shares and $ 1 billion in Series A’s mandatory convertible preference shares.
In a statement, the company said it would use the cash generated from the sales for general corporate purposes, including investments in streaming.
The company re-launched its CBS All Access streaming service earlier this month as Paramount + and announced a slew of reloads, spin-offs and original series and movies. The company said at an investor day in February that it would increase its streaming content spending to $ 5 billion by 2024.
With Disney + already having more than 100 million subscribers and HBO Max wanting to launch its own ad-supported offering in June, Paramount + wants to increase its existing subscriber base (more than 19 million between CBS All Access and Showtime), while also including Pluto, its free, ad-supported streaming offer.
Morgan Stanley and JP Morgan are the book buyers on offer and have 30-day options to buy ‘up to an additional $ 300 million in Class B ordinary shares and up to an additional $ 150 million in mandatory convertible preference shares,’ according to ViacomCBS.
The convertible share will automatically convert into Class B ordinary shares on April 1, 2024, unless it has been converted earlier.
The $ 3 billion sale also comes as ViacomCBS ‘share price has risen over the past few weeks. A month ago, 23 stocks traded at just over $ 64 a share. With the market closing on Monday, shares in the company traded more than $ 100 each.