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Discovery interests consolidated

Co. will be able to raise public money

Discovery Communications, currently a privately held operation, has agreed to consolidate the interests of its two owners, Discovery Holding Co. and Advance/Newhouse, into a new stand-alone public company.

Under the new setup, Discovery Communications will be able to raise public money to acquire more networks or Internet companies, putting it “in a stronger position to grow organically and through acquisition,” said prexy-CEO Dave Zaslav.

Since he took over the company late last year, Zaslav has engineered a major reorganization of the company, initiating multiple layoffs, closing Discovery’s underperforming retail stores and putting his own people into the top jobs at Discovery Channel, TLC, Animal Planet and other Discovery nets.

Wall Street has always had trouble analyzing Discovery as a private company because of its murky financial balance sheets– a problem the new public company is designed to clear up.

In exchange for combining its interests into Discovery, Advance/Newhouse, which held a one-third stake in the private company, will receive preferred stock that will be convertible into shares representing one-third of the new company.

Zaslav said the new company will continue to rely on the “guidance and involvement” of John Hendricks, founder and chairman of Discovery Communications; John Malone, chairman-CEO of Discovery Holding Co.; and Robert Miron, chairman-CEO of Advance/Newhouse.

No management changes are expected as a result of the transaction, which will be tax-free to Advance/Newhouse and the shareholders of DHC. After regulatory and shareholder approval, the consolidation should be completed by the second quarter.

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