Disney buys Valor (a peek at the 8-K)By http://profile.typepad.com/1237764140s22740 // October 31, 2012 in Exit Strategies
Thought this morning we should look at the 8-K the Walt Disney Company filed yesterday in conjunction with the announcement that it would purchase Lucasfilm Ltd.
Dave Itzkoff of the New York Times had tweeted that Disney's codename for the acquisition was "Project Valor," and a reference in the 8-K seems to corroborate that.
"The Sole Shareholder has entered into an agreement pursuant to which it has, among other things, irrevocably agreed to approve the Merger Agreement and, subject to certain limitations, to indemnify the Company with respect to certain representations and warranties about Valor and other matters."
Speaking of the Sole Shareholder (Shareholder Solo?): a Wall Street Journal story states that "Lucasfilm is wholly owned by producer George Lucas," but that's not exactly what the 8-K says or means by the defined term.
"The sole shareholder (the 'Sole Shareholder') of Lucasfilm is an entity affiliated with Lucasfilm Chairman and Founder, George Lucas."
Granted, that "entity affiliated" with Lucas might well itself be wholly owned by Lucas.
Last point: the deal reportedly is payable approximately half in cash, half in stock. But the 8-K says this instead:
"Under the Merger Agreement, the Sole Shareholder will receive merger consideration of $4.05 billion in the form of cash and stock.The amount of stock issued pursuant to the Merger Agreement will depend on adjustments based on cash distributions to the Sole Shareholder occurring immediately prior to closing, and subject to those adjustments, will consist of at least 32,348,243 shares of the Company common stock but in no event more than 40,348,243 shares of Company common stock."
The deal terms provide that the stock will be registered following closing, so the Sole Shareholder will be able to sell Disney shares on the open market. (In prepared remarks appended to the press release filed with the 8-K, Disney's CFO seems to say the Sole Shareholder's stock will soon be repurchased: "We continue to believe our shares are attractively priced at current levels and therefore, we currently intend to repurchase all of the shares issued within the next two years — and that’s in addition to what we planned to repurchase in the absence of the transaction.')
Sounds also like the Sole Shareholder has agreed to a no-shop. Though either party may walk if the deal doesn't close in 6 months.
Photo: chaines106 / Flickr.