Institutional investors in both Walt Disney Co. and Comcast Corp. are finding little magic in a potential merger of the two companies.
"As someone who owns both stocks, it's hard to see how we would gain from a merger unless the deal gets done really quickly and those revenue streams get going," said Tom Vanderventer, managing director at Smith Barney Asset Management, Stamford, Conn.
Mr. Vanderventer supports a deal if the price is right, but he doesn't want to see Comcast overpay, and he's not sure it's the best use of Comcast's capital. Smith Barney's growth funds owned 9.3 million shares of Comcast and 5.4 million shares of Disney as of Jan. 31, according to mutual fund research firm Morningstar Inc., Chicago.
Said Rob Gensler, portfolio manager of the Baltimore-based T. Rowe Price Associates Inc. Media and Telecom fund: "Comcast shareholders have to ask why they need to do this deal at all. Would the combination of the two companies offer greater growth prospects? Maybe Comcast's growth prospects aren't as great as we thought." T. Rowe Price owned 20.9 million Disney shares and 9.6 million Comcast shares as of Sept. 30, according to ShareWorld.