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paidContent - Spider-Man Meets Mickey Mouse: Disney Buying Marvel For $4 Billion In Stock, Cash

This story was written by Staci D. Kramer.


Updated: The Walt Disney Co. (NYSE: DIS) is buying Marvel Entertainment (NYSE: MVL) and its 5,000-character roster for a cool $4 billion in stock and cash. Marvel CEO Ike Perlmutter will stay on to oversee the Marvel properties as part of the deal, which has been approved by both boards but still faces shareholder and regulatory approval. The deal, which would help Disney expand its appeal to boys, was announced before the market opened Monday and the companies hope to close it before year’s end. It’s one of the largest acquisitions in Disney history and has the potential to transform the company. But it will take years in some cases before Disney can do more than reap the licensing fees from some key Marvel characters through its own movies, games and even theme parks. In an interview soon after the announcement, Disney CFO Tom Staggs told paidContent that the licensing “actually underscores the value of these properties.” One major unencumbered character when it comes to movies: Iron Man.

Later, Disney CEO Bob Iger told analysts: “We dont have any problematic strategic holes. This was a great opportunity at the right time. ... When you see a good opportunity in this market, you move with alacrity.” The deal, he added, fits perfectly with Disney’s three-pronged goal of creativity, technology and international. As for the 28 percent premium the bid represents for Marvel stockholders, Staggs said he was in favor of bargains but Marvel was in a strong position: “I think you have to pay a full and fair price.” Marvel shareholders will get a $30 in cash and 0.745 Disney shares for each Marvel share. That brings the total to $50 per share based on Friday’s close.

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DISNEY TO ACQUIRE MARVEL ENTERTAINMENT
Worldwide leader in family entertainment agrees to acquire Marvel and its portfolio of over 5,000 characters;
Acquisition highlights Disneys strategic focus on quality branded content, technological innovation and international expansion to build long-term shareholder value

Burbank, CA and New York, NY, August 31, 2009 Building on its strategy of delivering quality branded content to people around the world, The Walt Disney Company (NYSE:DIS)  has agreed to acquire Marvel Entertainment, Inc. (NYSE:MVL) in a stock and cash transaction, the companies announced today.

Under the terms of the agreement and based on the closing price of Disney on August 28, 2009, Marvel shareholders would receive a total of $30 per share in cash plus approximately 0.745 Disney shares for each Marvel share they own. At closing, the amount of cash and stock will be adjusted if necessary so that the total value of the Disney stock issued as merger consideration based on its trading value at that time is not less than 40% of the total merger consideration.

Based on the closing price of Disney stock on Friday, August 28, the transaction value is $50 per Marvel share or approximately $4 billion.

This transaction combines Marvels strong global brand and world-renowned library of characters including Iron Man, Spider-Man, X-Men, Captain America, Fantastic Four and Thor with Disneys creative skills, unparalleled global portfolio of entertainment properties, and a business structure that mximizes the value of creative properties across multiple platforms and territories, said Robert A. Iger, President and Chief Executive Officer of The Walt Disney Company. Ike Perlmutter and his team have done an impressive job of nurturing these properties and have created significant value. We are pleased to bring this talent and these great assets to Disney.

We believe that adding Marvel to Disneys unique portfolio of brands provides significant opportunities for long-term growth and value creation, Iger said.

Disney is the perfect home for Marvels fantastic library of characters given its proven ability to expand content creation and licensing businesses, said Ike Perlmutter, Marvels Chief Executive Officer.  This is an unparalleled opportunity for Marvel to build upon its vibrant brand and character properties by accessing Disneys tremendous global organization and infrastructure around the world.

Under the deal, Disney will acquire ownership of Marvel including its more than 5,000 Marvel characters.  Mr. Perlmutter will oversee the Marvel properties, and will work directly with Disneys global lines of business to build and further integrate Marvels properties.

The Boards of Directors of Disney and Marvel have each approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act, certain non-United States merger control regulations, effectiveness of a registration statement with respect to Disney shares issued in the transaction and other customary closing conditions. The agreement will require the approval of Marvel shareholders.  Marvel was advised on the transaction by BofA Merrill Lynch.


By Staci D. Kramer

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