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Disney to buy Marvel for $4 billion

Stock and cash deal to combine character library

Some of the hottest superheroes in the universe, including ones that have made mega money for rival film studios, will enter the Magic Kingdom courtesy of a $4 billion buyout of Marvel by Disney.

The announcement of the deal Monday marked the second time president and CEO Robert Iger wowed the industry with a surprise purchase. The first time came three years ago, when, shortly after replacing Michael Eisner, he gobbled up Pixar for $7.4 billion.

As with Time Warner's ownership of DC Comics, Disney's mash-up with Marvel will provide a link to fanboys -- a lucrative market on display at every Comic-Con and every opening of a superhero movie.

The list of history's Top 25 grossing movies contains the three "Spider-Man" movies and "Iron Man," all based on Marvel characters.

Among the key reasons for the deal is Disney's desire to attract males in the same number and degree it has managed to do with young females. TV channel Disney XD recently was created to replicate the company's success in attracting girls with princesses, fairies and Hannah Montana.

At least in the beginning, Disney must share its newfound superhero wealth. Marvel has pre-existing licensing deals that allow Sony to make "Spider-Man" sequels and Fox to make "X-Men" movies, and Paramount is set to distribute the next five films from Marvel's studio. Iger said Monday that those arrangements will be honored.

"It's the right thing from a legal perspective," Iger said.

Eventually, Iger said Disney probably will become the sole distributor of Marvel movies, some of which likely will be in 3D.

Marvel's own projects include "Iron Man 2," "Iron Man 3" and movies based on Thor, Captain America and the Avengers; Paramount has worldwide distribution rights to those films. Iger and Disney CFO Tom Staggs didn't disclose any changes that might be in store concerning Marvel's pipeline.

"We'll take a look and see, but the bottom line is we like what they've been doing so far," Staggs told The Hollywood Reporter.

An enthusiastic Iger told Wall Street analysts that Marvel's product "transcends gender and age" and that Pixar impresario John Lasseter already has met with Marvel talent.

"The group got pretty excited pretty fast," Iger said, without divulging which of the 5,000 Marvel characters might get the Pixar treatment either for the big or small screen.

Staggs stressed the "unexploited" characters, hinting that they might get bigger lives online, in video games and elsewhere.

Disney said Monday that it will acquire the superhero factory in a cash-and-stock transaction that values each share of Marvel at $50, a 29% premium to where the stock closed Friday.

The conglomerate will pay $30 in cash plus about three-quarters of a Disney share for each share of Marvel. The payment will fluctuate depending on the price of Disney shares so that not less than 40% of the price tag will consist of Disney stock.

Marvel CEO Ike Perlmutter will remain aboard to oversee the Marvel brand and its characters.

"The goal here is not to rebrand Marvel as Disney," Iger said.

Thirteen years ago, after Marvel went bankrupt, Perlmutter bested a couple of other financial titans -- Carl Icahn and Ron Perelman -- to take control of the company with his friend Avi Arad, now CEO of Marvel's film studio.

Just as Disney's acquisition of Pixar made the latter's CEO Steve Jobs a significantly wealthier man, the same is true with Perlmutter, who owns 37% of Marvel's stock. Perlmutter will reap about $880 million in cash and $590 million in Disney stock from the acquisition. But unlike Jobs, there are no plans so far to put him on Disney's board of directors.

The price tag includes Disney issuing 59 million new shares, but Staggs said the company will repurchase at least that many during the next 12 months. The acquisition will harm Disney's per-share earnings by about 5% in fiscal 2010 but will be a net plus to the company by 2012.

— Nielsen Business Media