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DISNEY'S LINK WITH CAP CITIES/ABC COULD BE SLOW AT FIRST
Published February 5, 1996
Disney shares "could be disappointing" in the first months of its merger with Cap Cities/ABC, according to Linda Sandler of the WALL STREET JOURNAL. The $19B deal could be completed this week and shares could begin trading early next week under the symbol DIS. While Disney's stock has been driven by performance of animated films, the addition of a broadcast partner means advertising fallout could drop income by $200M to $300M. Sandler writes, "Mergers are messy. To pay for the broadcaster, Disney will dilute its earnings by issuing as many as 155 million new Disney shares." Analyst David Londoner sees '96 profit coming in lower than '95 and thinks Disney could "fall short of its 20% growth target for '97 (WALL STREET JOURNAL, 2/5).