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Icahn's Marvel bid zapped
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April 28, 1997: 8:18 p.m. ET
Bondholders crying foul over comic giant's plan to merge business units
From Correspondent Fred Katayama
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NEW YORK (CNNfn) - Financier Ronald Perelman and bankers have reached a deal to sell Marvel Entertainment Group Inc.'s comic book and entertainment operations to its toy subsidiary Toy Biz Inc., Marvel said Monday.
The move, the latest bid by the comic-book king to restructure, is a blow to a competing bondholders' group headed by investor Carl Icahn.
Under the plan, Marvel's Fleer/SkyBox and Panini subsidiaries would be spun off to creditor banks and sources say most likely sold. That has Icahn and other bond holders crying foul.
Marvel, which filed for Chapter 11 bankruptcy protection in December, could file the plan to bankruptcy court officials later this week.
Once a superhero on Wall Street, Marvel is now trying to battle back. But the company's plans to merge its publishing and licensing businesses with its action toy manufacturer isn't turning investors' heads.
News of Marvel's plan had little effect on shares Monday as Marvel closed up 1/8 to 2-3/8 and Toy Biz ended unchanged at 10-1/4.
Jill Krutick, entertainment analyst at Smith Barney, said since the plan is highly complex, Wall Street wants to wait and see how it is received. (164K WAV) or (164K AIFF)
The plan would give Chase Manhattan Bank and the other Marvel lenders $420 million, a 28 percent stake in the combined company and full ownership of Marvel's trading card and sticker business.
Marvel said Chase Manhattan backs the plan and analysts suspect financier Ron Perelman does as well.
Marvel shareholders would get warrants to buy 12.5 percent of the merged company -- a provision that angered a group dissident bondholders led by Perelman's archenemy Icahn.
In a statement, Ichan's group promised to fight the latest plan.
"The banks and Toy Biz will gain a windfall at the expense of the shareholders. We will fight this plan vigorously with every legal remedy available under the bankruptcy laws," the group said.
The fireball-throwing is likely to continue for some time. Marvel said it may consider auctioning off the combined company if a better bid comes along.
That, analysts said, could attract the likes of Time Warner or Disney since media companies see characters like Spiderman and the X-Man as sure-fire money makers.
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Marvel Comics
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