- On a conference call with analysts discussing a $52B acquisition of key media assets of Twenty-First Century Fox (FOX, FOXA), Disney (NYSE:DIS) chief Bob Iger notes the deal should close in 12-18 months and highlighted the chance to expand Fox's Avatar franchise particularly considering new theme park lands.
- Along with the chance to unify rights and bring more content (X-Men, Fantastic Four, Deadpool) into the Marvel Cinematic Universe, Disney gets Fox's distribution rights to the first Star Wars film.
- After speculation that Fox CEO James Murdoch would come into Disney in a senior role and perhaps become a succession candidate for Iger, Iger says while Murdoch will be "integral" to combining the companies, "he and I will be discussing whether there is a role for him or not at our company."
- The deal will be accretive to EPS for the second fiscal year after closing, says Disney CFO Christine McCarthy, and Disney expects roughly $2B in cost synergies by 2021.
- With Fox continuing to pursue a buyout of the rest of Sky (OTCQX:SKYAY) before its Disney transaction, McCarthy says Disney's leverage will be about 2.9x total debt/EBITDA; 2.2x if the Fox/Sky deal is not completed. The company expects to return to historical leverage levels in any case 24 months after deal completion.
- Taking majority control of Hulu is going to be beneficial and result in "flowing more content in Hulu's direction," and managing Hulu "becomes a little more clear, a little more effective" in the new era, Iger says.
- Fox's regional sports networks are a "perfect complement" to ESPN's offerings, which are national in nature and will benefit from regional focus, Iger says.
- Iger expects the deal to receive a "significant amount of regulatory scrutiny" both in the U.S. and internationally, but that it will be important to remember the "aim of this combination is to create more high-quality product for consumers around the world" and to deliver it in more compelling ways.
- Premarket: DIS -0.9%; FOX -0.9%; FOXA -0.9%.
- Previously: Mouse eats Fox: Shares up; implications for Hulu, film franchises (updated) (Dec. 14 2017)
- Previously: Mega-media: Disney confirms Fox deal (Dec. 14 2017)
- Now read: Dow Dog Gains Topped By GE, Microsoft (NASDAQ:MSFT), And Apple (NASDAQ:AAPL), Per Broker October Targets
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.
Original article