Trian Partners Activist Presentation Deck
(1)
Confidential-Not for Reproduction or Distribution
Disney Materially Overpaid For The Fox Assets
d
(7)
6
• Disney appears to have paid 26.5x 2018A EBITDA for Fox's traditional media assets (excl. Hulu)
whereas comparable media transactions were completed at 11.9x LTM EBITDA(¹)
• The Fox deal created a massive incremental goodwill balance of -$50bn
• Disney had to rely on an ultra-aggressive $2bn synergy assumption, which would imply a
doubling of Fox's EBITDA, to justify the deal
.
While difficult to quantify, we believe that Fox's earnings power has deteriorated post-deal,
implying an even higher multiple paid than the 26.5x paid at closing (see following pages)
Sbn
Fox Equity Purchase Price ($38/share)(2)
(+) Acquired Net Debt / (Cash)(3)
(-) Equity Investments(4)
Adj. Fox EV
(-) RSN sale
(-) Yes Network
Remaining Fox EV
(-) Hulu Stake(8)
Fox Traditional Media EV (Film/TV)
EV
$71.3
($0.6)
($0.3)
$70.4
($10.6)
($3.5)
$56.3
($4.3)
$52.1
2018A
EBITDA
TFCF 2018A EBITDA from Disney Form B-K fed 8/23/1
Purchase price of $10 on divided by RSN LTM EBITDA of $1.7bn Sinclair Broadcasting Group, Inc. press release dated 5/3/19)
$4.0(5)
($1.7)
($0.3)(7)
$2.0
4 26.5x
,
Represents median of un-edited precent transactions analysis on an Enterprise Value /LTM EBITDA basis uned by one of Fax's Board advisors (Centerview in the rendering of their faimess opinion found in Disney's
Form 5-4 fied 6/28/18
From Disney press release and investor call transcript dated 6/2018
Represents the net of $19.2bn dect assumed and $19 bn cash acquired in the 21st Century Fox acquisition post-Sky stake sale (The Walt Disney Co. Form 8-K Fied 3/20/19
(4) Includes book value of investments in Endemol Shine ($180mm) and DraftKings (35mm) as of 6/30/18 (Form 6-K filed by The Walt Disney Co. dated 3/27/19 excludes Hulu (shown below
EV / EBITDA
Multiple
$2.0
17.6x
6.2x(6)
10.4x
Total RN EBITDA (including YES, Fox Sports Mexico & Bras) of $2 Obn as of 900/18 (Disney Form 8-K fed 8/23/1 less $1.7on of Sinclair RSN EBITDA Note we assume Fox Sports Mexico & Bran do not
generate substantial EDITDA and we do not factor in their potential purchase prices into this analysis given lack of disclosure on assel-level EBITDA or potential purchase prices.
Huu repurchased AT&T's 100% state in Apr 2019 for $1.436n, implying total Hulu valuation of $14.30 TFCF held a 30% stake at the time of its acquisition by Disney
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