Billionaire John Malone plans to convert the parent of the Discovery Channel into a publicly traded company, giving all investors a market for their shares.
Discovery Holding Co., run by Malone, and closely held Advance/Newhouse Communications agreed today to combine their stakes in Discovery Communications, owner of Animal Planet, The Science Channel and the Web site.
The tax-free transaction, expected to close in the second quarter, will give Discovery Communications Chief Executive Officer David Zaslav more flexibility over strategy and possible acquisitions. Shareholders of Englewood, Colorado-based Discovery Holdings will receive common stock of the new company.
“As a fully public company, Discovery will be in a stronger position to grow organically and through acquisition,” Zaslav said in a statement.
Advance/Newhouse, of Syracuse, New York, will get a 33 percent stake of the new company in exchange for its 33 percent holding in Discovery Communications. The company will elect two members to the new board of directors.
Discovery Holding will also spin off Ascent Media Group, a provider of video and audio post-production services for film and television, to its shareholders.
Discovery Holding Class A shares fell 73 cents to $26.69 at 4 p.m. in Nasdaq Stock Market trading. They have gained 66 percent this year.
