13:53 PDT 3/22/2021
in
Alex Weprin
The sale of class B common shares and series A convertible preferred shares takes place in the same month that the company officially launched Paramount +, and as the company’s share price rises.
ViacomCBS is looking for some new money to bolster its momentum in streaming. The company said on Monday it would take $ 2 billion in Class B common shares and $ 1 billion in Series A mandatory convertible preferred shares to trade.
In a statement, the company said it would use the cash generated from sales “for general corporate purposes, including investments in streaming”.
The company relaunched its streaming service CBS All Access as Paramount + earlier this month, announcing a series of reboots, spinoffs and original series and films in the process. On an investor day in February, the company said it expects to increase its spending on streaming content to $ 5 billion by 2024.
With Disney + already exceeding 100 million subscribers and HBO Max set to launch its own advertising offering in June, Paramount + is looking to boost its existing subscriber base (more than 19 million between CBS All Access and Showtime) while also boosting Pluto, free streaming offer and ad support.
Morgan Stanley and JP Morgan are the brokers of the offering and have 30-day options “to buy up to an additional $ 300 million of Class B common shares and up to an additional $ 150 million of mandatory convertible preferred shares,” according to ViacomCBS.
Convertible shares will automatically be converted into Class B common shares on April 1, 2024, unless they are converted earlier.
The $ 3 billion sale also comes at a time when ViacomCBS’s stock price has skyrocketed in recent weeks. A month ago, on February 23, the shares were trading at just over $ 64 per share. At the close of the market on Monday, the company’s shares were trading at more than $ 100 each.