Advance/Newhouse, Discovery Combine Holdings

Jun 4, 2008  •  Post A Comment

John Malone’s Discovery Holding Co. and Advance/Newhouse Programming Partnership reached a deal to combine their ownership stakes in Discovery Communications and create a new publicly held company to be called Discovery Communications Inc.
Advance/Newhouse, which is privately held, owns one-third of Discovery Communications. Financial terms of the deal were not disclosed.
Discovery founder John Hendricks will be chairman of the new company and David Zaslav, CEO of Discovery, will be CEO of the new company. Discovery’s management team will fill all the posts at the new company.
Discovery has been working toward becoming a public company whose earnings and balance sheet would be more transparent to investors.
The transaction is comprised of several steps. Discovery Holdings will spin off the networks and creative services business of Ascent Media Group to its shareholders.
Immediately after the spinoff, Discovery Holdings will combine with a subsidiary of a new publicly traded company. Discovery Holdings shareholders will receive shares in the new company.
Advance/Newhouse will contribute its interests in Discovery Communications and Animal Planet to the new company in exchange for preferred stock convertible into about one-third of the outstanding shares of the new company. It will get three seats on the new company’s board and have approval rights for some company actions.
Completion of these transactions is expected in the third quarter, subject to shareholder and regulatory approvals.

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