S&P: Disney on watch negative

Standard & Poor's said it affirmed its ratings on Comcast Corp., including its BBB corporate credit rating, and placed the BBB+ long-term and A-2 short-term corporate credit ratings on The Walt Disney Co. on CreditWatch with negative implications.

S&P said these rating actions follow Wednesday's announcement by Comcast of its unsolicited proposal to merge with Disney. If the transaction is consummated under the current proposed terms, the corporate credit rating on Disney will be lowered to BBB, the level of the combined new company.

Based on the proposed exchange ratio of 0.78 Comcast share for each Disney share, reflecting Tuesday's closing stock prices and the assumption of $11.7 billion in Disney's debt, the transaction values Disney at about $66 billion.

S&P said the merged company would have tremendous breadth as the largest U.S. cable operator; programming assets including a national network and several cable channels; a major motion picture and TV production studio; theme parks; and other entertainment assets, with pro forma 2003 revenues of about $45 billion. Leverage of the combined company would be close to the 3.3x net debt to EBITDA that Comcast reported for 2003.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.