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DISCOVERY ZONE OFFERS LYONS

 CHICAGO, Oct. 7 /PRNewswire/ -- Discovery Zone, Inc. (NASDAQ: ZONE) announced today the offering of its Liquid Yield Option(TM) Notes ("LYONs"(TM)) due Oct. 14, 2013. The LYONs are zero coupon subordinated notes and have no periodic interest payments. Each LYON is being offered at $391.06 per $1,000 principal amount at maturity, representing a yield to maturity of 4.75 percent per annum (computed on a semi-annual bond equivalent basis), and can be converted into Discovery Zone common stock at a conversion rate of 13.485 shares per LYON. Merrill Lynch & Co. is the sole underwriter of the offering.
 "We are pleased with the interest in our offering and the terms on which we were able to raise this capital," said Donald F. Flynn, chairman and chief executive officer.
 The offering will result in gross proceeds to Discovery Zone of approximately $96.7 million, or approximately $111.2 million if the underwriter's over-allotment option is exercised in full. Proceeds from the offering will be used by the company to expand operations by opening additional Discovery Zone FunCenters and may also be used in business acquisitions and for other general corporate purposes. The LYONs will have a principal amount at maturity of $255 million (exclusive of the over-allotment option granted the underwriter). The LYONs have been approved for quotation on the NASDAQ Small-Cap Market under the symbol ZONEL.
 Discovery Zone is the nation's largest owner, operator and franchisor of children's indoor playgrounds (FunCenters). Discovery Zone Fun Centers feature a distinct play zone comprised of a series of tubes, slides, ball bins, climbing mountains, air and water trampolines, obstacle courses, ramps, stairs and other devices for crawling, jumping, running, swinging and climbing. Discovery Zone FunCenters also include a separate play zone for smaller children, an open play area for infants and toddlers, a game room, party rooms, a food service area, a retail sales area and a parents room. At Sept. 30, 1993 there were 115 FunCenters (70 company-owned and 45 franchised) open in a total of 32 states and Puerto Rico. The company expects to have approximately 210 FunCenters open by Dec. 31, 1993.
 -0- 10/7/93
 /CONTACT: Robert D. Mitchum, vice president and chief financial officer, of Discovery Zone, 312-616-3800/
 (ZONE ZONEL)


CO: Discovery Zone ST: Illinois IN: LEI SU: OFR

BM -- CL019 -- 9690 10/07/93 10:35 EDT
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Publication:PR Newswire
Date:Oct 7, 1993
Words:393
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