SCHEDULE: Warner Bros. Discovery Affiliate Acquires Significant Stake in Anghami Through OSN Streaming Partnership

Warner Bros. Discovery's subsidiary, Dplay Entertainment Limited, has completed the first tranche of a strategic investment in OSN Streaming Limited, gaining substantial beneficial ownership and governance rights in Anghami Inc., signaling a long-term partnership in the MENA streaming market.

Summary

• Dplay Entertainment Limited, a wholly-owned subsidiary of Warner Bros. Discovery, Inc., has acquired 11.28% of OSN Streaming Limited's total issued share capital for $19,000,000 on July 23, 2025, as the first of three tranches.
• Upon full completion of all three tranches, Dplay Entertainment Limited will hold 33.83% of OSN Streaming Limited for a total cash payment of $57,000,000.
• The Reporting Persons (WBD and Dplay Entertainment) beneficially own 72,411,753 Ordinary Shares of Anghami Inc., representing 70.8% of the class.
• This beneficial ownership includes 36,985,507 Ordinary Shares held by OSN Streaming, 13,426,246 Ordinary Shares issuable from warrants, and 22,000,000 Ordinary Shares issuable from the conversion of $55,000,000 in senior unsecured convertible notes.
• The convertible notes include an Initial Note of $12,000,000 issued on December 16, 2024, a Second Note of $20,000,000 issued on February 7, 2025, and Additional Notes of $23,000,000 issued on July 25, 2025, all convertible at $2.50 per share.
• The percentage of ownership is calculated based on a total of 102,313,374 Ordinary Shares, comprising 66,887,128 outstanding shares as of July 25, 2025, plus the shares from warrants and convertible notes beneficially owned by the Reporting Persons.
• The transaction is intended for investment purposes and to establish a long-term strategic partnership between the Reporting Persons, OSN Streaming, and Anghami Inc.

Sentiment

Score: 8

Explanation: The filing indicates a strong strategic investment by a major global media company into Anghami Inc. through a significant stake in OSN Streaming. This provides substantial funding and strategic backing, along with governance influence, which is highly positive for Anghami's growth prospects and market position. The complex structure and potential future carve-out introduce some uncertainties, but the overall intent and financial commitment are very favorable.

Positives

• Establishes a significant strategic partnership between Warner Bros. Discovery and Anghami Inc. through OSN Streaming, potentially enhancing Anghami's market position and content offerings.
• Provides Anghami Inc. with substantial funding through convertible notes totaling $55,000,000, supporting its operations and growth initiatives.
• Grants Dplay Entertainment Limited significant governance influence, including board representation and observer rights on Anghami Inc.'s board and audit committee, allowing for strategic alignment.
• The Call Option provides a potential path for the Purchaser to acquire full ownership of OSN Streaming's stake in Anghami, indicating a long-term commitment and potential for deeper integration.
• The Put Option provides a downside protection mechanism for the Purchaser's investment, ensuring a minimum return (15% IRR) under certain conditions.

Negatives

• The complex multi-tranche acquisition structure for OSN Streaming shares extends the full investment over several years, with the Second Completion expected by March 31, 2026, and the Third Completion by March 31, 2027.
• The beneficial ownership percentage of 70.8% is largely based on convertible instruments (warrants and notes), which could lead to significant dilution for existing shareholders upon conversion.
• The Call Option and Put Option mechanisms introduce complexity and potential future valuation disputes, as they rely on determining 'Issuer Fair Market Value' and 'OSN Streaming Net Debt Amount'.
• The potential 'Music Business Carve-Out' suggests a possible future divestiture of a core Anghami asset, which could alter the company's strategic focus and valuation.

Risks

• Future tranches of the OSN Streaming share acquisition are conditional on the absence of any governmental authority orders or judgments that would make the transfer unlawful or restricted.
• The exercise of the Call Option is subject to conditions, including OSN Streaming owning 100% of Anghami's outstanding shares (Minority Buyout Condition) and obtaining all necessary governmental consents and approvals.
• Fluctuations in the 'Issuer Fair Market Value' could impact the Call Option Price and potentially trigger the CF Put Option if the value falls below the Call Option Floor.
• The ability to arrange third-party debt funding for Anghami Inc. is restricted, requiring the Purchaser's prior written consent, which could limit financing flexibility.

Future Outlook

The Reporting Persons intend to review their investment regularly and may acquire additional shares, sell existing holdings, engage in proxy solicitations, or propose extraordinary business transactions, including a potential 'Minority Buyout' of Anghami Inc. or a 'Music Business Carve-Out'. They also reserve the right to change their investment purpose and formulate new plans or proposals concerning Anghami's operations, strategy, and financing, consistent with the terms of the SPA and Shareholders' Agreement.

Industry Context

This strategic investment by Warner Bros. Discovery into Anghami Inc., a leading music streaming platform in the Middle East and North Africa (MENA) region, through OSN Streaming, signifies a growing interest by global media conglomerates in expanding their digital footprint and content distribution in emerging markets. It aligns with a broader industry trend of consolidation and strategic partnerships to gain market share and leverage local expertise in competitive streaming landscapes.

Comparison to Industry Standards

• The investment structure, involving a multi-tranche acquisition of a holding company (OSN Streaming) that in turn holds a significant stake in the target company (Anghami), is a common strategy for large media companies like Warner Bros. Discovery to gain influence and potential control in new markets without a direct, immediate full acquisition.
• The use of convertible notes and warrants is a standard financing mechanism, providing capital to Anghami while offering the investor potential for increased equity ownership at pre-determined prices, similar to deals seen with other growth-stage tech or media companies.
• The governance provisions, including board appointments and reserved matters, are typical for significant minority investments, allowing the investor to protect its interests and influence strategic decisions, comparable to arrangements in joint ventures or strategic alliances in the global entertainment industry.
• The inclusion of call and put options, with specific valuation floors and IRR targets, reflects sophisticated financial engineering common in private equity or strategic investments, aiming to provide both upside potential and downside protection for the investor, similar to agreements in deals involving companies like Spotify or Deezer in their earlier growth phases.

Management Changes

Corporate Governance

Stakeholder Impact

• **Shareholders (Anghami Inc.)**: Potential for significant dilution from the conversion of warrants and convertible notes. However, the strategic partnership with Warner Bros. Discovery and the associated funding could enhance long-term value and market reach.
• **Shareholders (OSN Streaming Holding)**: Their stake in OSN Streaming is being partially acquired by Dplay Entertainment, and they are subject to various agreements (SPA, Shareholders' Agreement, Option Agreement) that define their rights and obligations, including potential future sale of their remaining stake.
• **Employees (Anghami Inc.)**: The strategic partnership and funding could lead to increased investment in operations, potentially creating new opportunities or requiring strategic adjustments.
• **Customers (Anghami Inc.)**: The partnership with Warner Bros. Discovery could lead to enhanced content offerings, improved services, or broader reach, benefiting the user base.
• **Creditors (Anghami Inc.)**: The issuance of convertible notes represents new debt, but the strategic backing and potential for future equity conversion could stabilize the company's financial position.

Next Steps

• Second Completion of the SPA expected by March 31, 2026, for Dplay Entertainment to acquire an additional 11.28% of OSN Streaming.
• Third Completion of the SPA expected by March 31, 2027, for Dplay Entertainment to acquire a final 11.28% of OSN Streaming.
• Purchaser may exercise the Call Option to acquire OSN Streaming Holding's OSN Shares during the period from July 1, 2027, to June 30, 2028.
• Potential discussions and actions regarding a 'Minority Buyout' of Anghami Inc. or a 'Music Business Carve-Out' if the Purchaser makes an Exclusion Election.

Key Dates

Recommendation

The filing details a significant strategic investment by Warner Bros. Discovery, a global media giant, into Anghami Inc. through a controlling stake in OSN Streaming. This partnership brings substantial capital ($55 million in convertible notes) and strategic alignment, including board representation and veto rights over key decisions. For Anghami, this provides crucial funding, enhanced credibility, and potential access to Warner Bros. Discovery's vast content library and distribution networks, which are critical for growth in the competitive streaming market. While the beneficial ownership percentage is high due to convertible instruments, the long-term strategic value and financial backing from a major player outweigh the immediate dilution concerns for a growth-oriented investor. The structured nature of the deal, including future tranches and option agreements, indicates a committed, long-term partnership, making Anghami an attractive 'buy' for investors looking for exposure to the MENA digital media landscape with strong institutional support.

Keywords

Anghami Inc., Warner Bros. Discovery, OSN Streaming, SEC filing, Schedule 13D, beneficial ownership, strategic partnership, convertible notes, warrants, corporate governance, streaming media, Middle East, North Africa, media investment, equity stake, board representation, option agreement, music business