JEFFERIES: Disney's potential Fox deal could cost $40 billion

  • Disney reportedly held discussions with 21st Century Fox about buying a portion of its assets. Jefferies says those assets could be worth $40 billion. 
  • Shares of Disney and Fox are up after the reports of the talks.

Disney reportedly held discussions with 21st Century Fox to buy a portion of its assets. According to Jefferies, those assets could be worth $40 billion.

The media and entertainment company is reportedly eyeing Fox's international cable networks, its Star film studio, and it's non-sports/non-news cable networks, such as FX and National Geographic. In the event of a deal, John Janedis of Jefferies believes Fox and its properties could be worth 40% above current levels, or $39 per share. 

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There's value in the "sum of the parts," Janedis notes, which could give Fox considerable upside. He estimates that the international cable networks are worth $14 billion at a multiple of 10x EBITDA, the film studio is worth $560 million at 9X EBITDA, the non-sports or news cable networks is worth $1.2 billion in 8.5X EBITDA, and stakes in SKY and other assets could be valued at $8.6 billion and $5 billion, in addition to Fox's 30% stake in Hulu.

Fox's shares have risen 10% since news of the discussions between the media conglomerates were revealed. Disney's shares have gone up 1.58%.

Disney live action movies in production:

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Disney Live-Action Movies in Production
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Disney Live-Action Movies in Production

Donald Glover will play Simba in the upcoming live-action adaption of "The Lion King," and James Earl Jones will reprise his role as Mufasa (!!!). According to Disney, the film is on the "fast track" through production and may arrive sooner rather than later. Jon Favreau will direct -- he also directed 2016's "The Jungle Book," so he's sure to crush it!

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Now this is interesting: Disney is developing a story centered on Prince Charming (either from "Cinderella" or "Snow White"). There's a lot of work to be done there since the original men weren't exactly riveting characters.

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In perfect casting news, Reese Witherspoon has signed on to play the sassy Neverland fairy in "Tink."

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Your childhood crush is coming to life. The new "Aladdin" will reportedly be a brand-new take on the beloved story and is expected to seriously deviate from the original plot. In March 2017, Disney announced open casting calls to find their perfect Aladdin and Jasmine. They're looking for Middle Eastern actors, and shooting begins this summer.

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We've seen remakes of "Peter Pan" before, but the magical story is slated for another upcoming live-action reboot. It's difficult to cast because not too many actors have pointed elf ears.

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What's Christopher Robin up to now? The upcoming "Winnie the Pooh" adaption will show us: In this version, he'll be all grown up.

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The live-action "Mulan" is currently in pre-production, and the actress taking on the title role hasn't yet been announced. It's scheduled for a 2018 release.

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Disney is working on a real-life "Little Mermaid," and she better still be a redhead.

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Emma Stone will play the evil Cruella in the 2018 flick. You've gotta assume she received offers for "The Little Mermaid," too, and she was like, nah, I know what I'm about.

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Disney announced an "Aladdin" prequel that reveals Genie's backstory, but the plan was tabled (or maybe entirely scrapped) in favor of an Aladdin-focused story. We'll see if it moves back into development.

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"The Sword in the Stone," released in 1963, is making its return! The story features King Arthur before he reigned supreme: He was an orphan who received special lessons from Merlin the wizard.

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Tim Burton is directing the live-action "Dumbo," which means it may not be quite so cheery as the original.

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The new adaption of "Pinocchio" will reportedly be only loosely based on the original story.

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After the smash success of 2016's "The Jungle Book," it was no surprise that Disney decided to move forward with a sequel.

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Angelina Jolie will return as Maleficent in a sequel to the 2014 film.

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"Snow White," originally released in 1938, is getting a much-deserved remake. 

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Did you know Snow White has a sister? Neither did we, but apparently her name is "Rose Red" and she's getting her own live-action movie. She hangs out with the dwarves after her Snow White meets her poisonous (temporary) end.

Credit: Disney

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Rupert Murdoch, the media mogul behind Fox, has reportedly rejected Disney's offer as it currently stands. 

"Given the potential structure, we do not think the remaining assets are appealing enough to FOXA as a standalone to complete a deal in the proposed form," Janedis wrote in a note. Disney would have to offer the company at least $37 billion to make the deal worth it.

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Disney has recently made a series of investments to boost its direct-to-consumer video streaming services.

Fox's shares are trading at $28.27 though it has been lagging down 4.39% year over year. Disney stock is trading at $101.63 and is down 5.07% for the year.

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SEE ALSO: CREDIT SUISSE: Disney needs to be rewarded for going after Netflix

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