Disney-Fox Deal: Shares Of Both Companies Rise As Wall Street Embraces Plan
Wall Street signaled its approval of the massive Disney-21st Century Fox transaction, sending shares in Disney up 3% and Fox’s up nearly 7%.
On an overall down day for the market, Disney stock closed at $110.68, while Fox reached $34.88. Those results bucked the typical pattern for stocks after a merger announcement, where the buyer tends to be hit with a penalty and the target getting a bump.
Disney announced it will pay $52.4 billion to acquire most of the assets of Fox. Including assumption of debt, the deal’s total value was pegged at $66.1 billion.
While some analysts reiterated bearish views on Disney or at least expressed skepticism about its strategy, the prevailing sense on Wall Street seemed to be that the company that successfully absorbed Pixar, Marvel and Lucasfilm was set to repeat those feats on a grander scale.
Shares in News Corp. dipped by 6 cents to finish the day at $16.22. Rupert Murdoch, who controls both News and Fox, said today that a rumored plan to re-combine the assets of News and Fox was “way, way in the future,” if at all.
Many other stocks in the media sector gained modest ground on the day as investors pondered the potential next chess moves on the media M&A board. One important piece is AT&T, whose pending deal for Time Warner has been delayed by a government lawsuit. Its shares dipped a fraction today, but they have recovered most of their losses from the regulatory roadblocks thrown up by the Trump Administration. At $37.77, shares are at their highest level since mid-October.
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