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Disney's premium for Marvel: Not enough, or too much?

August 31, 2009 | 12:41 pm

Some Marvel Entertainment Inc. shareholders may wonder if they’re getting a high enough premium for the company in Walt Disney Co.’s $4-billion takeover offer today.

Wall Street may be wondering just the opposite: whether Disney is overpaying.

The cash-and-stock deal -- each Marvel share will fetch $30 cash plus 0.745 of a Disney share -- valued Marvel at exactly $50 a share based on Disney’s closing stock price on Friday.

That was a 29.4% premium to Marvel’s closing price of $38.65 on Friday.

Ironman As premiums go, that’s less than the 36.8% average offered this year in other U.S. merger deals worth $1 billion or more, according to data firm Dealogic Inc.

Still, Marvel shares already were up 26% year to date through Friday, nearly double the advance of the Standard & Poor’s 500 index.

And based on the price it’s paying, Disney estimated that Marvel won’t begin to add to the Burbank giant’s earnings until fiscal 2012.

Disney executives’ tone on a conference call with analysts today suggested that they know they’re going to take some heat for paying up relative to where Marvel shares were trading.

Disney Chief Financial Officer Thomas Staggs said Marvel was in a "strong financial position. This is not a deal that they had to do. ... So we are acquiring a premium company, a premium set of assets, and for that I think you have to pay a full and fair price."

Disney shares were down 73 cents, or 2.7%, to $26.11 at about 12:30 p.m. PST, trimming their year-to-date gain to 15%.

Marvel shares were up $9.74, or 25%, to $48.39, just slightly below the $49.45-a-share value of the deal given the slide in Disney’s stock today.

If Wall Street believed that some Marvel shareholders might pressure Disney for a higher bid, the stock would be trading above the deal’s value today.

Also note that Marvel CEO Ike Perlmutter owns about 37% of the stock, which helps to lock up the deal as agreed.

-- Tom Petruno

Image: Iron Man. Credit: Marvel Entertainment

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