DIRECTORS MUST PICK DIRECTION DISNEY LACKS TAKEOVER SHIELD.

Byline: Barbara Correa Staff Writer

The Walt Disney Co. doesn't have any built-in takeover defenses against Comcast - or any other potential bidders, for that matter. So a lot of what happens in the weeks ahead of the March 3 shareholders meeting will depend on which direction the board of directors decides to go.

Disney doesn't have a poison-pill clause: a corporate agreement designed to defend a company from takeovers. But the board could implement one at any time to repel a hostile bid.

Such a move would be unlikely, however, because it would look like a last-ditch attempt to ``protect entrenched management,'' a particularly sensitive issue at present, said Tom Taulli, a mergers and acquisitions professor at the University of Southern California and author of ``The Complete M&A Handbook.''

Disney shareholders also could vote at the meeting to replace the board of directors, and under a consent-solicitation right a majority of shareholders can vote on a new slate of directors at any time.

Theoretically, ousted board members Roy E. Disney and Stanley Gold could use that loophole to attempt a palace coup.

``It doesn't look like they're affiliated with Comcast now, but that doesn't mean they couldn't be,'' said Thomas Runkel, manager of the Runkel Value Fund, which has 5.5 percent of its assets in Disney stock.

Industry watchers say, however, that the board is very firmly in Eisner's pocket, and that any show of disunity would hurt everybody involved because it would turn off alternative bidders.

Still, the prospect of a management shake-up isn't completely implausible.

Institutional Shareholder Services, Inc., which makes recommendations on proxy votes and corporate governance, advised last week that shareholders vote against Eisner at the meeting as a signal that real boardroom change is needed.

``If there were ever a case for separating the roles of Chairman and CEO, this company is the poster child,'' the ISS statement said.

The advisory also said it would like to see more independence injected into the board.

Disney's appointed presiding board member, former Senate Majority Leader and Eisner champion George Mitchell, gave up a separate appointment as a Disney consultant and stopped doing legal work for the company.

But he is still an Eisner loyalist, and as the go-to man for vetting alternative Comcast bids and setting the board's overall agenda, he isn't as independent as he could be.

``There's a huge pressure on the independent directors to go to Eisner and say, What are you going to do to get (the bid) up?'' said Runkel. ``Eisner keeping his job includes naming a person to succeed him and laying out a time frame.''

Since the Comcast bid is not a tender offer directly to shareholders, however, there are no tight deadlines to respond to the offer. That means Eisner will bide his time, shoring up support and maintaining the relaxed face he presented at last week's earnings meeting.

Barbara Correa, [phone]

barbara.correa(at)dailynews.com