The Incredible Goofy? Not So Fast, Investors Tell Marvel, Disney

Marvel Entertainment, the home of Spider-Man, Iron Man and the Incredible Hulk, is poised to join forces with Walt Disney Co. in a pending $4 billion merger. But as quick as you can say "Spider-Mouse" or "Iron Duck," the comic book giant's shareholders are digging in for an epic battle to stop the deal in its tracks.

In three class-action lawsuits filed in the Delaware Chancery Court this month Marvel investors argue that the company's officers and directors breached their fiduciary duties to the shareholders by failing to shop for a better deal.

The defendants also allegedly did not conduct a fair and open sales process before agreeing to sell Marvel to Disney for a song, according to the lawsuits.

"The proposed transaction does not appear to adequately value Marvel's shares or serve the best interests of the company's public shareholders," plaintiff Paul W. Morand says in one of the complaints.

In a deal that allegedly requires no outside financing, Disney is offering Marvel stockholders $30 in addition to 0.745 shares of Disney stock for each Marvel share.

If the merger goes through, Disney would inherent the intellectual property rights to nearly 5,000 comic book characters.

It also means that Disney would profit from upcoming theatrical releases based on the Marvel characters Thor, Captain America and the Avengers.

Given this vast intellectual property portfolio, the shareholders argue, Marvel's officers and directors should have worked harder to maximize value in the deal.

The plaintiffs also contend that key provisions in the proposed merger agreement, announced Aug. 31, are designed to limit Marvel's ability to shop for a better deal.

The agreement contains a "no solicitation" provision blocking Marvel from entertaining alternative offers, according to the lawsuits. It also includes a $140 million termination fee that discourages the comic book giant from walking away from the deal.

In a statement Disney President and CEO Bob Iger said there will be no "Disneyfication" of Marvel.

"Once the deal closes there is expected integration, but we plan to keep Marvel as an entity and respect ... the talent that is there," he said.

All three suits seek a court order declaring the merger unlawful and blocking it from going through.

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