Shareholders Approve Discovery Deal

To Begin Trading As a Separate Public Company on Sept. 18

By Mike Farrell -- Multichannel News, 9/16/2008 4:38:00 PM

Discovery Holding at the company’s annual shareholders meeting Tuesday approved a series of steps that would allow Discovery Communications Inc. to begin trading as a separate public company on Thursday.

Discovery Holding first announced the plan to spin off its 100% ownership in Ascent Communications and combine its interests in Discovery Communications-- which includes cable networks Discovery Channel, and TLC-- and its interest in Animal Planet with Advance Newhouse Programming Partnership’s 33.3% stake in the networks in June.

As a result of the approval of Discovery Holding shareholders, the parties expect to close the transaction by the end of the day on Sept. 17.

In a statement, Discovery Holding said that following shareholder approval DHSC will spin-off to stockholders as a wholly-owned subsidiary, Ascent Media Corp., that will include the networks and creative services business of Ascent Media Group.

Immediately following that spin-off, DHC will combine with a subsidiary of Discovery Communications and existing DHC shareholders will receive shares of common stock in DCI. Advance/Newhouse will contribute its interests in Discovery and Animal Planet to DCI in exchange for preferred stock that, immediately after the closing of the transaction, will be convertible into shares representing one-third of the outstanding shares of common stock of DCI.

The preferred stock held by Advance/Newhouse will entitle it to elect three members of DCI’s board of directors and to exercise approval rights with respect to the taking of specified actions by DCI and its subsidiaries.

Shares of DCI will begin trading on the NASDAQ stock exchange on Sept. 18.