Buying Into DISNEY Thru FOX

With the Philippine market in the red the past few days. I stumbled upon some news in the US. The Fox-Disney merger has been moving closer to completion. Disney won its bid to acquire Fox’s movie and TV assets, from rival Comcast. All is left to do is wait for the authorities to grant permission to merge.

The deal goes like this. Disney will give Fox shareholders 0.2745 shares of Disney for every Fox shares they own. They would also pay Fox shareholders for the tax benefits upon the merger. Fox, will have to strip the movie and tv assets from the broadcast, sports and news assets, this will become New Fox. All shareholders of current Fox, will receive Disney shares and 1:1 New Fox shares.

My thinking is like this, I want to buy Disney at a low price. If I buy Fox at 45 (my entry price), I will have a New Fox shares and some shares of Disney. Immediately selling New Fox shares at $7 would give me 15% immediately on my investment (22% if the New Fox shares trade at $10). Plus the added $1 or $2 tax benefit through dividends.

Its not a bad deal. I will own Disney, a great company. Disney upon the deal, will receive back all the Marvel rights it has sold years earlier. X-men, The Simpsons, Deadpool etc and some other TV shows and Movie assets, as well as Hulu the livestreaming website where it can grow its revenue to compete with NetFlix. This is a great acquisition for Disney. And its a lifetime investment I feel. I love all the Marvel movies.

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