The Walt Disney Company made the first move in what is expected to be a wave of consolidation in Hollywood on Monday with a surprise US$4B bid for Marvel Entertainment in a deal that will unite Iron Man and Spider-Man with Mickey Mouse and Hannah Montana. The deal, which will earn more than US$1.4B for Ike Perlmutter, Marvel’s chief executive and largest shareholder, raised the prospect of other transactions at a time when the entertainment industry is in flux. Disney shares fell US$0.82 to US$26.02 in afternoon trading. The cash-and-stock deal is worth US$50/shr based on Disney’s price on Friday. Shares in Marvel jumped US$10.35, or 27%, to a record high of US$49. Bob Iger, Disney’s chief executive, said the company hoped eventually to distribute Marvel movies, but that it would respect its current distribution agreements with rival studios. Films based on Marvel “Comics” characters, such as X-Men and The Incredible Hulk have generated billions of dollars for other Hollywood studios. The valuation, 30% above Marvel’s share price of last Friday, “is as high a premium as I’ve seen in any studio deal”, said Tuna Amobi, an analyst with Standard & Poor’s. “But it seems clear that there are masses of potential synergies, particularly licensing and international opportunities, that could justify that.” The combination of Marvel’s 5,000 characters with Disney’s distribution infrastructure underscores Disney’s strength amid plunging advertising revenues and weak consumer spending.
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