The $4.2 billion figure sounds expensive on the surface.  While this was not updated much because of the merger, Marvel’s Thomson Reuters consensus data lists revenue expectations of $507 million for 2009 and over $659.8 million for 2010.  The Thomson Reuters consensus estimate for fiscal year-end September-2010 is $36.8 billion.  Marvel’s cash balance was too small to really matter.  The entire asset base here is the character line-up and the added existing distribution channel of Marvel that does not overlap with that of Disney.

But Disney has been a master of toys and licensed products from games to clothes to toys to product placement and more.  There is no reason to not expect that the Mouse House will increase that effort with Marvel.  Disney can also afford to take more chances compared to what Marvel could do only on its own.  Disney can also point to its share performance of over 20% since the Marvel acquisition first broke and can easily show that it knows how to milk more value in a group of characters than a standalone company because of its larger channel of media distribution and with stores and theme parks.

The deal vote is slated for final approval to come this week at 9:00 AM EST on December 31, and it is now expected that shareholders will approve the deal and the formal closure will be then.  The M&A arbitrage spread was under 0.1% on last look, giving almost no chance of a deal break-up risk.

Marvel’s CEO Ike Perlmutter also owns about 37% of Marvel.  While very few people are worth an extra $1 billion or so, he will have oversight of the Marvel operation and can offer continuity to a brand (or group of brands) that have worked.  It is still merely guesswork on which character will be the next blockbuster for a new movie franchise owned solely by Disney.  The company has deals already in place that would give Disney less revenue capture on existing movie franchises, but that does not have to be the case for future blockbuster character brands which have not had any movie development deals signed.  Ditto for television and print.

This merger would be very expensive for a private equity firm to have pulled off even back in the M&A bubble of 2005 to 2007.  But Disney has not been penalized at all for making this acquisition.  Shares fell only 2.9% the day after the merger was announced, and they were actually up by more than 5% within two weeks.  Since the closing bell price of August 31 at $25.74 (dividend-adjusted), Disney is up by more than 25%.

The deal might sound pricey on the surface.  But Wall Street and Main Street are operating under the assumption that Disney can milk far more from this family of characters than what Marvel could have ever accomplished on its own.  If the economy can avoid a double-dip recession and if the movie market stays strong, this deal might end up looking like it was dirt cheap.

JON C. OGG

Reuters:  The approval process for Tengzhong to buy Hummer has started in China.

Reuters:   Philips Electronics (NYSE:PHG) beat expectations.

Reuters:   Liz Claiborne’s (NYSE:LIZ) decision to sell its brands at J C Penny (NYSE:JCP) should help both companies.

Reuters:   Citigroup (NYSE:C)) is expected to be fined $600,000 by the Financial Industry Regulatory Authority over derivatives transactions that helped foreign clients avoid taxes on dividends.

Reuters:   Lazard (NYSE:LAZ) chief Bruce Wasserstein is in the hospital.

Reuters:   Small US firms are being crushed by the credit crisis.

WSJ:   CNOOC may offer a rival bid to Exxon’s (NYSE:XOM) for developing a Ghana oil field.

WSJ:   Companies are granting options to executives prior to M&A activity. The practice was done at Omniture (NASDAQ:OMTR), which was bought by Adobe (NASDAQ:ADBE), and Marvel (NYSE:MVL) ,which was bought by Disney (NYSE:DIS).

WSJ:   China is using futures exchanges to fight high commodities prices.

WSJ:   Microsoft (NASDAQ:MSFT) said the T-Mobile clients using handsets powered by the software company’s products may loss key data on their phones.

WSJ:   The SEC investigation is hurting already struggling KB Homes (NYSE:KBH).

WSJ:   Comcast (NASDAQ:CMCSA) wants the muscle of NBC Sports.

WSJ:   Lufthansa will offer advanced wireless connections on all of its long-haul flights.

WSJ:   Foreclosures are rising among expensive housing.

WSJ:   Investors are betting on Google’s (NASDAQ:GOOG) shares ahead of earnings.

WSJ:   Consumers are being asked to save more and spend more at the same time.

WSJ:   Wells Fargo’s (NYSE:WFC) takeover of Wachovia will allow it to expand its mutual fund business.

WSJ:   Financial firms are having to set aside money for off balance sheet funds.

NYT:   The Administration is upping attacks on News Corp’s (NYSE:NWS) Fox News.

NYT:   Google (NASDAQ:GOOG) and IBM (NYES:IBM) are offering university students tools to handle vast amounts of complex data.

NYT:   E-commerce companies are getting better at encouraging people to buy things that abandon at online stores.

NYT:   Clicks on display ads are dropping quickly.

FT:   Blackstone (NYSE:BLK) will list a number of the firms that it owns.

FT:   The US pay czar is getting tough on AIG (NYSE:AIG) pay packages.

FT:   Many investors are urging Bank of America (NYSE:BAC)  to hire an outside chief.

Bloomberg:   Soros will put $1 billion into green technology.

Douglas A. McIntyre

Reuters:   The G20 is looking to nurture the recovery and add financial safeguards.

Reuters:   Taxpayers may never get back all of their US bailout funds.

Reuters:   The Fed says the recovery in under way.

Reuters:   A new AIDS vaccine protected a number of people in a trial.

Reuters:   The tech world believes that IPOs will return soon.

Reuters:   The SEC is planning insider trading charges in the Dell (DELL) deal to buy Perot Systems (PER).

Reuters:   Airbus may need extra cash for new planes.

Reuters:   Citigroup (C) will focus branches in six cities.

Reuters:   Moody’s (MCO) may bear the brunt of ratings agency mistrust.

WSJ:   Investors and participants at the G20 are worried about the dollar’s future role

WSJ:   GMAC is using capital to compete more effectively with large banks.

WSJ:   Boeing (BA) is beginning to fix early flaws in the 787.

WSJ:   Nintendo cut the price of the Wii.

WSJ:   Hewlett-Packard (HPQ) is using its size to undercut rivals.

WSJ:   Russia’s largest car maker OAO AvtoVAZ will cut more than 26,000 jobs.

WSJ:   Marvel’s (MVL) CEO got options ahead of the Disney (DIS) deal.

WSJ:   AOL (TWX) and Yahoo! (YHOO) are competing more directly.

WSJ:   South Korea will get the Apple (AAPL) iPhone.

WSJ:   Honda (HMC) will build a unicycle for the elderly.

WSJ:   China’s sovereign wealth fund made a $1.9 billion investment in debt issued by Indonesia’s Bumi Resources.

WSJ:   Steel and paper are going to be part of the next trade dispute with China.

WSJ:   The FASB approved an accounting rule that will help tech company earnings.

WSJ:   Hedge funds are still not cutting fees.

WSJ:   Russia’s richest man is buying control of the New Jersey Nets.

NYT:   Oil companies are finding new fields at a rapid rate.

NYT:   Ford’s (F) new small car should help it with Asian buyers.

NYT:   E-commerce is helping to get Chinese consumers to spend more.

FT:   Microsoft (MSFT) says that top game publishers are developing software for its new game controller.

Bloomberg:   The stock rally is bring buyout firms back into the market.

Douglas A. McIntyre

Reuters:   Congress will demand details of the Bank of America/Merrill Lynch deal.

Reuters:   Holiday spending is expected to be flat.

Reuters:   It may be too late to catch the turnaround in eBay’s (EBAY) stock.

Reuters:   Senator Dodd favors a bank “super cop”.

Reuters:   The Conference Board said pay provisions like golden parachutes should be abandoned.

Reuters:   FedEx (FDX), Cisco (CSCO) and Office Depot (ODP) were cautious about the economy.

Reuters:   NY insurance officials raised concerns about using Moody’s (MCO).

WSJ:   The US, Europe, and China are trying to set up plans to drive lasting growth.

WSJ:   Stocks may hit a bear market as the DJIA nears 10,000 up 46% in six months.

WSJ:   Banco Santander plans to raise more than $7 billion.

WSJ:   GM’s exits from the leasing business is hurting Cadillac.

WSJ:   Google’s (GOOG) digital book deal is being debated by the industry and attorneys general.

WSJ:   Wynn (WYNN) will try to raise $1.6 billion in an IPO.

WSJ:   Large websites are trying to cut out inventory from ad networks so that they can raise rates.

WSJ:   Yahoo! (YHOO) will launch an ad campaign.

WSJ:   New bank rules will probably hurt investor returns.

WSJ:   The IPO market is regaining momentum.

WSJ:   Mutual funds are seeing inflows as the market rises.

WSJ:   The head of WPP painted a troubling picture of the return of the ad market.

WSJ:   A cut in greenhouse gases may not have to hurt economic growth.

WSJ:   The head of Alcatel-Lucent (ALU) said there is little concern about being bought by Chinese interests.

WSJ:   Goldman Sachs (GS) is putting $250 million in to China auto firm Geely.

WSJ:   The race for successful obesity drugs is heating up.

NYT   Disney (DIS) faces certain rights issues over Marvel (MVL) characters

NYT:   Analysts say that newspaper earnings have not hit bottom.

NYT:   The IRS extended amnesty for offshore accounts.

NYT:   Hybrid internet-TV is making progress in Europe.

FT:   The recession has caused a steep drop in greenhouse gas emissions.

FT:   Bank regulators are worried about complacency as markets recover.

FT:   A California bond issue brought in $8.8 billion.

Bloomberg:   A potential relapse in housing poses problems for Bernanke.

Douglas A. McIntyre

Reuters:   The EU could slow a takeover of Sun (JAVA) by Oracle (ORCL).

Reuters:   Home sales and factory orders signaled an end to the recession.

Reuters:   Executives a bailed out banks may make millions on stock options.

Reuters:   Some analysts were skeptical about Bank of America’s (BAC) plan to repay part of its TARP money.

Reuters:   The Disney (DIS) buyout of Marvel (MVL) may take some time to pay off.

Reuters:   Hollywood is looking to India and China for capital.

Reuters:   American (AMR) will cut more than 900 flight attendant jobs.

WSJ:   Back-to-school sales were weak raising questions about the holiday season.

WSJ:   The mortgage industry wants Fannie Mae (FNM) and Freddie Mac (FRE) turned into smaller private companies.

WSJ:   Several new transactions may show the M&A market has bottomed.

WSJ:   Sales at GM and Chrysler dropped last month.

WSJ:   Sony (SNE) plans to launch 3D TV.

WSJ:   The government stimulus package seems to be helping the economy.

WSJ:   eBay (EBAY) sold two-thirds of Skype to an investor group.

WSJ:   Radio firms are trying to get lenders to change terms of  loans to keep them afloat.

WSJ:   Long-term holdings of equities may not be the best way for investors to make money.

WSJ:   The EU Chamber of Commerce says that it is becoming more difficult to do business in China.

WSJ:   Take-Two (TTWO) sales fell 68% and the company posted a loss.

WSJ:   The global economy is gaining steam.

WSJ:   Joblessness in large cities is still rising quickly.

WSJ:   Citigroup (C) is attracting buyers for its call center in Japan.

WSJ:   Deutsche Bank (DB) will close a popular oil ETF.

WSJ:   Wells Fargo (WFC) plans to return $25 billion to the US government without selling new stock.

WSJ:   Chinese property developers are racing to get out IPOs.

WSJ:   CIT (CIT) will defer an interest payment.

NYT:   Manufacturing improved after 18 weak months.

NYT:   Pharma companies are risking huge R&D sums to find cancer treatments.

NYT:   There is still concern that the advertising market will not recover quickly.

NYT:   Problems in commercial real estate are just beginning.

NYT:   Freedom Communications filed for bankruptcy.

NYT:   The early adoption of technology is becoming more mainstream.

FT:   Asian car makers are increasing their market share in the US.

FT:   US media lost $10 billion in advertising in the first half of the year.

FT:   The WTO warned of protectionism due to the downturn.

Bloomberg:   RHJ upped its offer for Opel.

Bloomberg:   Alcatel-Lucent (ALU) plans to raise a large sum of money.

Douglas A. McIntyre

Reuters:   China’s manufacturing index gained.

Reuters:   A  late Labor Day will hurt August retail sales.

Reuters:   A US judge ruled against AIG (AIG) in a dispute with its former CEO.

Reuters:   Bank of America (BAC) is offering to pay back part of its government bailout money.

Reuters:   Several regional surveys show the US economy picking up.

Reuters:   Boeing (BA) named a new head of its commercial plane unit.

Reuters:   The US pay czar will review compensation proposals from firms which still have TARP funds.

Reuters:   Carl Icahn cut his stake in Yahoo! (YHOO).

Reuters:   Southwest (LUV) is waiting for a decision from US officials about whether it will have to ground planes.

WSJ:   Disney (DIS) bought Marvel (MVL) for $4 billion.

WSJ:   Brazil plans to play a big role in producing crude from its newly discovered oil reserves.

WSJ:   Financial derivatives known as accumulators are making a comeback.

WSJ:   ”Tobacco companies including Reynolds and Lorillard filed suit against the FDA alleging free-speech restrictions under new marketing regulations.”

WSJ:   The IRS will mine mortgage payment data.

WSJ:   WalMart.com (WMT) will allow other vendors to market products on the site.

WSJ:   Apple (AAPL) plans an iPod event for early this month.

WSJ:   Taxpayers are getting returns from trillions of dollars in government financial investments which may not last.

WSJ:   The creator of a Chinese clone of Microsoft (MSFT) Windows has become a local hero.

WSJ:   Dell (DELL) will sell Brocade’s (BRCD) network products.

WSJ:   The DJIA had its best August since 2000.

WSJ:   The dollar may lose its role as the No.1 world currency.

WSJ:   Viacom’s (VIA) Paramount unit will be hurt by the Disney (DIS) buyout of Marvel (MRVL).

WSJ:   E*Trade (ETFC) rose after one of its holders said it would not sell its stake.

WSJ:   Sony (SNE) will put Google’s (GOOG) Chrome browser on its PCs.

NYT:   China is tightening its grip on rare minerals.

NYT:   Pension advisers for GM may have their compensation reviewed by the pay czar.

NYT:   A new “green” venture fund has raised more than $1 billion.

NYT:   Chevron (CVX) accused Ecuador officials of taking bribes.

NYT:   The WTO approved sanctions against the US because of subsidies to cotton growers that hurt Brazil.

FT:   PetroChina (PTR) will buy into two Canadian oil sands projects for $1.4 billion.

Bloomberg:   The head of EADS still sees no rebound in global aircraft orders.

Douglas A. McIntyre

American International Group (NYSE: AIG) is giving back some of last week’s gains after Barron’s gave a harsh reminder here.

BJ Services Company (NYSE: BJS) is surging on a deal where Baker Hughes Inc. (NYSE: BHI) is acquiring the company….

Genzyme Corporation (NASDAQ: GENZ) is down over 3% on a downgrade and ahead of an FDA review date tomorrow.

Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) are both getting their wings clipped after FBR reminds of no underlying value remaining….

Human Genome Sciences, Inc. (NASDAQ: HGSI) is getting clipped as buyout hopes fade.

Marvel Entertainment, Inc. (NYSE: MVL) is surging after being acquired in a serious surprise merger by Walt Disney Co. (NYSE: DIS).

If you wish to be notified by email when the top day trader alerts hit, along with news of IPO’s, key offerings, guru investor data on Buffett and others, mergers, and more, you can join our open email distribution list which goes out several times per week.

JON C. OGG

• Allergan (AGN) Raised to Buy at Citigroup.
• BJ Services (BJS) Cut to Underperform at Wells Fargo.
• Citi Trends (CTRN) Cut to Neutral at JPMorgan.
• Elan (ELN) Raised to Buy at UBS.
• Endo Pharmaceuticals (ENDP) Started as Buy at Citigroup.
• Marvel Entertainment (MVL) Cut to Neutral at Janney
• Peabody Energy (BTU) Raised to Outperform at FBR.
• Texas Instruments (TXN) Raised to Hold from Underperform at Jefferies; Reiterated Sell w/ $14 target at Auriga.
• Texas Roadhouse (TXRH) Cut to Neutral at Baird.
• Tyson Foods (TSN) Cut to Hold at Deutsche Bank.

Jon C. Ogg
July 20, 2009

• American Water Works (AWK) Started as Buy at Brean Murray.
• CardioNet (BEAT) Cut to Hold at Citigroup; Cut to Hold at boutique firm Roth.
• Checkpoint Software (CHKP) Cut to Neutral at JPMorgan.
• IAC/Interactive (IACI) Started as Outperform at Oppenheimer.
• Marvel Entertainment (MVL) Raised to Overweight at JPMorgan.
• Myriad Genetics (MYGN) down on downgrades from RBC, Oppenheimer, Citigroup, Morgan Joseph, and more.
• Novo Nordisk (NVO) Raised to Buy at Goldman Sachs.
• Symantec (SYMC) Started as Outperform at JMP Securities.
• Werner Enterprises (WERN) Raised to Overweight at JPMorgan.

After today, we’d expect analyst coverage to start getting this until at least next Tuesday because of the shortened week.  We have already seen the effects of fewer participants this week, particularly after such a stellar quarter that just ended yesterday.

Jon C. Ogg
July 1, 2009

Barclays (BCS) Cut to Sell at UBS.
Blue Nile (NILE) Cut to Negative at Susquehanna.
Consolidated Edison Inc. (ED) Cut to Hold at Jefferies.
Marvel Entertainment (MVL) Cut to Market Weight at Thomas Weisel.
Royal Bank of Scotland (RBS) Cut to Sell at UBS.
Sempra Energy (SRE) Cut to Hold at Jefferies.
UBS (UBS) Cut to Hold at Societe Generale; Raised to Hold from Sell at ING.

JON C. OGG