Analyst Likes Possible Deal Between Disney and Fox

TV stocks rise after CNBC report

At least one Wall Street analyst is taking a closer look at the potential deal in which The Walt Disney Co. would acquire most of the businesses of 21st Century Fox, and he likes what he sees.

The blockbuster report by CNBC that Disney could acquire Fox’s movie, studio, non-sports network and distribution assets sent TV stocks higher in late trading Monday.

In a report Monday, Omar Sheikh of Credit Suisse said it was “hard to argue against the rationale for this deal.” Sheikh put a $47 billion price tag on the transaction and said it could easily be financed by Disney and would be welcomed by both sets of shareholders.

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It “would also drive a re-rating of the whole sector, in our view,” Sheikh added.

Spokespeople for both Disney and Fox declined to comment.

Sheikh said the strategic benefit for Disney would be providing greater scale to invest in original content and much stronger over-the-top distribution at a time when traditional distribution platforms are shrinking.