John Malone, the billionaire investor and media executive, may see the value of his Discovery Inc. shares cut by almost $280 million as a result of its merger with AT&T Inc.’s media businesses -- a deal he vigorously supports.
Bloomberg reports Malone owns 6.19 million Discovery Class B shares, which currently trade at $78 each, making his holding worth about $483 million. But under the deal announced this week, those shares will convert on a one-for-one basis into the stock of the new company, the same ratio as Discovery’s Class A common shares, which trade at around $33 each.
“I am delighted to fully support this transaction, without asking for or receiving a premium for my high vote shares,” Malone said Tuesday in a statement. “I believe we are creating real value for shareholders and a legacy investment for my grandkids.”
Malone's portfolio includes SiriusXM and Pandora. There have been reports Malone would like to acquire of larger stake in iHeartMedia.
Malone’s B stock carries supervoting rights -- 10 each per share. And they have traded at a modest premium to the other common shares. But they soared in March in the aftermath of the stock selloff by Archegos Capital Management and reached $128 at one point, giving the cable TV executive a paper windfall of $353 million. Tuesday’s statement suggests that premium will evaporate with the conversion, along with his extra voting rights.
The deal, which will merge AT&T’s Warner Bros. studio, CNN and HBO businesses with Discovery, the parent of HGTV and Animal Planet, was announced on Monday. AT&T investors get 71% of a new publicly traded company, while shareholders of Discovery will own the balance. The deal is expected to close in the middle of next year.
In his statement, Malone cited the “industrial logic” of putting the businesses together. Discovery CEO David Zaslav, who will lead the combined operation, was asked why Malone isn’t receiving a premium for his shares during a conference call Monday.
Malone’s B stock carries supervoting rights -- 10 each per share. And they have traded at a modest premium to the other common shares. But they soared in March in the aftermath of the stock selloff by Archegos Capital Management and reached $128 at one point, giving the cable TV executive a paper windfall of $353 million. Tuesday’s statement suggests that premium will evaporate with the conversion, along with his extra voting rights.
The deal, which will merge AT&T’s Warner Bros. studio, CNN and HBO businesses with Discovery, the parent of HGTV and Animal Planet, was announced on Monday. AT&T investors get 71% of a new publicly traded company, while shareholders of Discovery will own the balance. The deal is expected to close in the middle of next year.
In his statement, Malone cited the “industrial logic” of putting the businesses together. Discovery CEO David Zaslav, who will lead the combined operation, was asked why Malone isn’t receiving a premium for his shares during a conference call Monday.
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