DISNEY VOWS FAIR REVIEW OF OFFER.

Byline: Greg Hernandez Staff Writers

Top Walt Disney Co. executives were careful to avoid talking about Comcast Corp.'s hostile takeover bid Thursday during the second day of a conference for investors and analysts at Walt Disney World Resort in Orlando, Fla.

But Disney's board of directors has vowed what a spokesman called a ``thorough, searching and fair'' review of the $54 billion bid that came, seemingly out of nowhere, early Wednesday morning from Philadelphia-based Comcast, the nation's biggest cable operator.

Former U.S. Sen. George Mitchell, the Disney board's presiding director, said directors met on Wednesday and asked management and outside advisers to consider the bid and report back promptly.

``I believe that I can speak for all the members of the board in saying that we are determined to conduct the most thorough, searching and fair analysis consistent with the interests of our shareholders and to respond in an appropriate manner,'' Mitchell said in a speech at the conference.

Mitchell also took the opportunity to defend the embattled Disney chairman and chief executive officer, Michael D. Eisner, whose woes were compounded this week when fund adviser Institutional Shareholder Services recommended that shareholders vote against electing Eisner to Disney's board of directors at their annual meeting to be held March 3.

``The recommendation with respect to Mr. Eisner is wholly unjustified,'' Mitchell said.

The conference, traditionally used as something of an elaborate Disney pep rally, has been overshadowed in recent days by the Comcast bid that has the media world abuzz over what might happen next.

During a presentation on the Burbank-based company's financial outlook Thursday, Chief Financial Officer Tom Staggs got a laugh when he referred to Wednesday as ``a pretty uneventful day.''

``We realize our overriding goal is to manage the Walt Disney Co. in the best interests of our shareholders,'' Staggs said.

If the proposed merger comes to fruition, it would produce the world's largest media company with revenues of $46 billion in 2003, enough to edge past Time Warner's $40 billion.

Comcast is proposing to buy Disney for $54 billion in stock and assumption of $11.9 billion of Disney debt. But the bid is widely viewed as too low - merely a starting point in negotiations. The bid equaled only about $26 per share, and consensus among media analysts is that an offer would have to be north of $30 per share to tempt Disney shareholders even to consider it.

Disney shares continued an upward trajectory Thursday, up 40 cents, or 1.45 percent, to close at $28 - a two-year high - on the New York Stock Exchange. Shares of Comcast fell by 3.75 percent on the Nasdaq exchange to close at $30.06 each.

Industry experts said Thursday that Comcast not only will have to come up with a bigger bid, but could have competition from rivals more friendly to Eisner.

Among possible suitors being mentioned prominently are media moguls Barry Diller of IAC/InterActiveCorp and John Malone of Liberty Media. The thinking is that either the two could come to Eisner's aid by assembling something of an all-star team to bid against Comcast if Disney shareholders warm to the prospect of a merger.

Eisner could use some friends right now. The Comcast offer is the latest in a recent confluence of events rocking Eisner's nearly two-decade reign as head of the Disney empire that includes a movie studio, theme parks, the ABC television network and several cable channels, as well as a professional hockey team.

Among the other possible Disney suitors are General Electric, which owns NBC and recently agreed to acquire Vivendi's entertainment assets, and Viacom, which owns the CBS television network, Paramount Pictures movie studio and cable channels including MTV, but lacks cable operations.

Still, both Viacom and GE would likely face a major uphill battle in trying to win regulatory approval and would likely have to divest some major assets in the process.

Most regulatory experts don't expect a Comcast-Disney marriage to face big antitrust or Federal Communications Commission review hurdles.

There has even been talk that software giant Microsoft Corp. could emerge as a player after making a digital media deal with Disney on Monday. But some analysts do not count Microsoft as a contender.

``You can bet that Microsoft is mulling over the possibility of these types of deals,'' said Robert Becker, analyst with Argus Research Corp. in New York. ``But I don't think Microsoft can maximize the concept of movies for Disney more than Comcast can.''

Of other possible suitors, most believe Time Warner is also out, even though it is reducing its debt as it starts to recover from its disastrous merger with AOL. It is thought that company executives would have difficulty persuading the board to consider another major merger.

Unlike Time Warner, GE and Viacom have preferred to remain focused on the creation of news and entertainment programming and have not bought into the infrastructure of distribution like cable companies and Internet providers.

Staff Writer Evan Pondel contributed to this story.

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com

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(color) Michael D. Eisner, who has long reigned over The Walt Disney Co., addresses investors Thursday in Florida.

Bruce Weaver/Associated Press