Discovery Holding Co. and Advance/Newhouse on Thursday announced that they would combine their stakes in Discovery Communications to form a new publicly traded company.
Under the terms of the deal, Advance/Newhouse’s interest in Discovery and the network Animal Planet will be converted into one-third of the outstanding shares of the new holding company, which will own 100 percent of Discovery Communications.
Discovery also said that it plans to spin off its Ascent Media Group unit to shareholders.
With a 66 percent stake in Discovery, cable mogul John Malone’s Liberty Media is the company’s largest shareholder. Advance/Newhouse controls the remaining 33 percent.
In May, Cox Communications sold its 25 percent share in Discovery to Liberty and Advance/Newhouse for $1.3 billion in cash and the Travel Channel properties.
“Today’s transaction will unlock the full potential and value of Discovery, and provide a broader range of options to pursue their aggressive growth strategy in the future,” said Malone, who serves as chairman and CEO of Discovery Holding.
The transaction is expected to close in the second quarter of 2008.
“As a fully public company, Discovery will be in a stronger position to grow organically and through acquisition,” said Discovery Communications president and CEO David Zaslav. “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.”