Marvel meets Disney

NEW YORK: Walt Disney has agreed to buy Marvel Entertainment for about $4 billion in cash and stock, adding comic-book characters Iron Man and Spider-Man to Disney’s line-up of princesses and live-action stars. Marvel investors will receive $30 a share in cash plus 0.745 Disney shares, the companies said in a statement on Monday. The deal is Disney’s fourth-largest acquisition by announced total value, according to data compiled by Bloomberg.  Text Courtesy: Bloomberg The purchase gives Disney, the operator of theme parks and the ABC Broadcast Network, ownership of more than 5,000 Marvel characters.  Films based on Iron Man, Spider-Man and Wolverine have pulled in hundreds of millions at the box office. Disney chief executive officer Robert Iger said buying Marvel will allow Disney to extend the characters in its parks and stores. “We have a great opportunity to grow the Marvel brand,” Iger said, in an interview with Bloomberg Television on Monday. Based on the August 28 closing price of Disney’s stock, the transaction values Marvel at $50 a share. That’s a 29% premium to Marvel’s closing price that day. Reliable Franchise "They have a reliable franchise of characters which should do well in the parks, bolster their live-action film pipeline and improve their standing with boys," said Chris Marangi, an analyst for Rye, New York-based Gabelli & Co., who recommends holding Disney shares. "You can't look at the price based on trailing earnings.  There's a pipeline of films and very profitable licensing revenue here."  Disney, the world’s biggest media company, fell 48 cents, or 1.8 percent, to $26.36. Shares of the Burbank, California- based company had gained 18 percent this year before today.  Marvel said earlier this month that second-quarter profit fell 38 percent after a drop in licensing sales related to the "Iron Man" and "Incredible Hulk" movies. “Iron Man,” released by Viacom Inc.’s Paramount Pictures in May 2008, generated $585.1 million worldwide, making it the second-biggest release of 2008, according to researcher Box Office Mojo LLC. The sequel is scheduled for May 2010.  The deal will require approval from Marvel shareholders. Bank of America Merrill Lynch advised Marvel on the transaction.  The 1995 takeover of Capital Cities/ABC Inc., valued at $19.5 billion, is Disney’s largest acquisition, Bloomberg data show.