Discovery Holding Company has a non-binding letter of intent with Advance/Newhouse Programming Partnership to combine their stakes in Discovery Communications and Animal Planet, creating a 100% publicly traded company, rather than the current 66.66% situation. No management changes are anticipated.
Advance/Newhouse will trade its current stakes in Discovery Communications and Animal Planet for new preferred shares of the new public company. It will have the right to name two members to the board of directors. Just prior to the closing, discovery Holding Company will spin off to its shareholders Ascent Media Group, a technical media services company for television networks and movie studios.
So, there will be two publicly traded stocks where now there is a complicated part public, part private ownership situation.
"The new structure will enhance our ability to produce and distribute the high quality programming that has been our hallmark since the company was founded two decades ago. I’d also like to extend our sincere gratitude to John Hendricks, John Malone and Bob Miron whose many years of leadership and guidance have greatly benefited Discovery. We are thrilled that we will have their ongoing guidance and involvement in the company’s future," David Zaslav, President and CEO, Discovery Communications.
TVBR observation: Wall Street had wanted for some time for Discovery to be a fully public company, but traders were strangely cool to the announcement, sending the stock of Discovery Holding Company lower. That may be because of questions about just what Ascent Media Group is worth – and whether it will be put up for sale or try to fly solo as a public company.
