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Fashion Police
Disney Disses Comcast Offer
Mickey is not ready for a new boss?yet.
The board of directors for the Walt Disney Company has unanimously rejected a $54-billion hostile takeover offer from cable giant Comcast Corp. But Disney left the door open for a future deal, if the price is right.
"We are committed to creating shareholder value now and in the future and will carefully consider any legitimate proposal that would accomplish that objective," the board said in a statement Tuesday. "In any proposal by Comcast, or any other company, the board will consider and assess the value to be received in exchange for the shares of Disney and also the appropriate premium to reflect the full value of Disney."
Comcast's surprise proposal came about just one week ago, when Comcast CEO Brian Roberts approached his Disney counterpart, Michael Eisner. Eisner initially rejected the proposal, but his hand was forced when Comcast went public with the bid.
In an all-stock offer, Comcast offered to trade each Disney share for 0.78 Comcast shares. The company also offered to assume $11.9 billion in Disney debt. All told, the offer was valued around $54 billion. Mickey's minions said that number is about $6.6 billion too low and that the proposal was $3.60 less a share than its current market price.
For now, Comcast appears to be sticking to its guns and standing by its initial offer.
"Our proposal to acquire the Walt Disney Company reflects a full and generous valuation based upon Disney's prospects and performance over a long period of time, representing a significant premium over Disney's unaffected share price during any relevant measurement period over the last three years," Comcast officials said in a statement. "We maintain the belief that our merger proposal represents a sound and compelling proposition for both sets of shareholders."
Many Industry insiders believe the Comcast bid will be just the opening salvo in an attempt to takeover the Disney empire, which includes ABC, ESPN, the Disney and Miramax movie studios and a host of theme parks.
"When a company is exposed to a bid like this, the odds are rather high that it will not remain independent," Harbir Singh, professor of management at the Wharton School, told the Philadelphia Inquirer.
Lowell Singer, a media analyst with SG Cowen Securities, told the Los Angeles Times that "there are certainly some other companies out there who've probably spent more than a couple of minutes contemplating this."
Among the other potential Mouse House suitors: Time Warner, EchoStar Communications and Liberty Media.
Comcast merged with AT&T Broadband in November 2002, making it the largest cable TV company in the country, serving 21 million subscribers. In addition to E! Networks (including E! Television, the Style Network and E! Online), the company holds majority stakes in Comcast-Spectator, the owner of the Philadelphia Flyers and 76ers, Comcast SportsNet, Golf Channel, Outdoor Life Network and G4.
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