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Sale of Fox Family in Jeopardy

posted on 2001-10-18 13:03 EDT
According to Reuters The Walt Disney Co. is reviewing its planned $3 billion cash acquisition of cable TV's Fox Family Channel following the Sept. 11 attacks.

According to Reuters The Walt Disney Co. is reviewing its planned $3 billion cash acquisition of cable TV's Fox Family Channel following the Sept. 11 attacks in the United States, a spokesman said on Wednesday. ‘’We are concerned about the potential impact recent events could have on the deal, and we are reviewing it,'' said Disney spokesman John Dreyer. He declined to detail Disney's concerns and whether they included a renegotiation of the acquisition's price, but he did say the companies continue to work toward completing a deal. Dreyer said a specific closing date had not yet been set because of the numerous approvals required for the deal, especially in foreign countries where Fox Family has channels.
October 18: Haim Saban's seat at the table of Toon Titans seems less of a sure thing today as the Walt Disney Corp. said it was rethinking its planned purchase of Fox Family Network. Saban, who built his entertainment business by importing cheap Japanese animation and superhero shows, owns almost half of Fox family and was set to score a $2 billion payday if the deal went through. Rupert Murdoch's News Corp. owns the remaining shares.

REUTERS said: "When the deal was struck in July, financial analysts had expressed some concern that Disney was paying a rich premium to get its hands on the cable network. Disney agreed to pay $3 billion in cash and assume $2.3 billion in debt for Fox Family, putting the deal's total value at $5.3 billion. Merrill Lynch analyst Jessica Reif Cohen estimated that Fox Family generated $150 million annually in earnings before interest, taxes, depreciation and amortization (EBITDA), putting the price at about 35 times EBITDA. That figure implied ‘’a fairly rich takeout,'' she wrote in a research note in July. Despite the deal's relatively rich price, financial industry players generally liked the acquisition because Fox Family provides Disney with a new outlet for TV programs such as those on Disney's ABC broadcast TV network. Back in July, Reif Cohen labeled it ‘’a perfect fit for Disney.''

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