Company Town: Disney’s Mega-Merger : The ABCs of a Deal : The Impact

How the biggest entertainment deal in history will affect various groups:

Shareholders:

* Capital Cities/ABC Inc. shareholders would receive the equivalent of $65 in cash plus one share of Walt Disney CO. stock, or a total of $122.38 per Capital Cities/ABC share at the time the deal was announced.

* Shareholders may request proportionately more cash or Disney stock than in the above exchange ratio, but depending on whether the cash or stock portions are oversubscribed, they may not get the ratios they request.

* Current holders of Disney and Capital Cities/ABC bonds may face ratings downgrades because of the large amount Disney would borrow to complete the deal.

Public:

* Capital Cities’ ESPN sports channel and the Disney Channel may be marketed together, especially overseas.

* With access to the top-rated TV network, Disney’s cartoon characters, movies and sports properties should become even more pervasive.

* Visitors to Disneyland, Walt Disney World and other Disney attractions can expect to see “cross selling” tied to popular ABC offerings such as “Home Improvement.”

Industry:

* Pressure may mount for other network linkups. Westinghouse Electric Corp. is said to be mulling a $5-billion bid for CBS Inc. General Electric Co.’s NBC network is a frequent subject of merger speculation.

* Disney and Capital Cities/ABC competitors must decide how to confront a giant that is both a higly respected producer and a powerful distributor of entertainment, sports and information programming.

The Companies’ Finances

PROFIT

Disney

In billions of dollars:

1994: $1.1

Capital Cities / ABC

In millions of dollars:

1994: $679.8

REVENUE

Dinesy Filmed Entertainment: 47% Theme parks and resorts: 35% Consumer products: 18%

Capital Cities / ABC Broadcasting: 83% Publishing: 17%

STOCK PRICES

Quarterly highs since 1990, except latest:

Disney

Monday: $58.625, up $1.25

Capital Cities / ABC

Monday: $116.25, up $20.125

Sources: Capital Cities / ABC Inc., The Walt Disney Co., TradeLine

Researched by JENNIFER OLDHAM / Los Angeles Times *

More Disney Coverage:

* Disney bids for Capital Cities/ABC. A1.

* Deal shows networks’ importance. A1.

* Deal finalized in strict secrecy. A1.

* Burbank gets big image boost. D4.

* Debt won’t hurt Disney finances. D4.

* Disney’s KCAL ponders its fate. D4.

* Future management an issue. D4.

* A look at entertainment giants. D4.

* Reaction from key leaders. D5.

* The companies at a glance. D5.

* ABC’s Gibson put on spot. D5.

* Bass and Murphy in spotlight. D6.