DISNEY WHIRL HOSTILE BID COULD CREATE LARGEST MEDIA COMPANY STUNNING OFFER WOULD NET BILLIONS.Byline: Greg Hernandez Staff Writer BURBANK - A stunning $54 billion hostile takeover Hostile Takeover A takeover attempt that is strongly resisted by the target firm. Notes: Hostile takeovers are usually bad news, as the employee moral of the target firm can quickly turn to animosity against the acquiring firm. bid Wednesday by Comcast Corp. for The Walt Disney Noun 1. Walt Disney - United States film maker who pioneered animated cartoons and created such characters as Mickey Mouse and Donald Duck; founded Disneyland (1901-1966) Disney, Walter Elias Disney Co. that would produce the world's largest media company could lead to sweetened sweet·en v. sweet·ened, sweet·en·ing, sweet·ens v.tr. 1. To make sweet or sweeter by adding sugar, honey, saccharin, or another sweet substance. 2. To make more pleasant or agreeable. offers as Chairman Michael D. Eisner fights for his job and his vision for the entertainment giant. Comcast proposed to buy Disney, the iconic entertainment and media conglomerate, for $54 billion in stock and assumption of $11.9 billion of Disney debt. But the bid from Philadelphia-based Comcast, the nation's biggest cable operator, is widely viewed as too low and merely a starting point Noun 1. starting point - earliest limiting point terminus a quo commencement, get-go, offset, outset, showtime, starting time, beginning, start, kickoff, first - the time at which something is supposed to begin; "they got an early start"; "she knew from the in negotiations. News of the Comcast bid came as Disney was set to release impressive first-quarter financial results during a two-day investors and analysts conference at Disney World Resort in Orlando, Fla. Eisner referred to the situation as ``the unsolicited offer that we received,'' and said nothing more except that the Disney board would consider the offer: ``I asked management and the company's advisers to provide an in-depth analysis of the proposal to enable the board to respond appropriately.'' Comcast Chief Executive Officer Brian Roberts For the CEO of Comcast, see . Brian Michael Roberts (born October 9, 1977 in Durham, North Carolina), nicknamed B-Rob, is a switch hitting second baseman who plays for the Baltimore Orioles in the MLB. cited the evolving media landscape, especially for television and the Internet, as the impetus for the surprising offer. At a New York news New York News was a newspaper drama which was broadcast in the United States by CBS as part of its 1995 fall lineup. New York News was the story of the fictional New York Reporter conference Wednesday, Roberts told reporters that he approached Eisner on Monday about a merger of the companies. He said Eisner, without consulting Disney's board, told him, ``It was not of immediate interest to put this together.'' Roberts said it was ``unfortunate'' that Eisner was ``not willing'' to engage in discussions, which led to Roberts making a public proposal to Eisner and directly to Disney's board of directors. ``This combination would create one of the world's premier entertainment and distribution companies and attempt to restore the Disney brand name to pre-eminence,'' Roberts said. ``This is an incredibly compelling combination.'' As a single company, Disney and Comcast would be the world's largest media powerhouse with revenues of $46 billion in 2003, enough to edge past Time Warner's $40 billion. One immediate sticking point sticking point n. A point, issue, or situation that causes or is likely to cause an impasse. Noun 1. sticking point - a point at which an impasse arises in progress toward an agreement or a goal is that the current bid equaled only about $26 per share, less than what Disney shares were valued at when trading ended Wednesday. Disney shares were up $3.52, or 15 percent, to close at $27.60 after news of the takeover offer and Disney reporting earnings of 33 cents a share, topping analysts' estimates by 13 cents a share. Shares of Comcast fell by 8 percent on the Nasdaq exchange to $31.23. The consensus among media analysts is that an offer would have to at least be north of $30 per share in order to be attractive enough to Disney shareholders to consider. ``The potential synergy and powerful market position of the combination makes absolute sense,'' Credit Suiss-First Boston wrote in an analyst note. ``However, the initial offer is too low, and potentially by a significant margin.'' The Comcast offer is the latest in a recent confluence of events that appears to have made Eisner's standing more tenuous as he fights to remain in control of the media conglomerate that includes a movie studio, theme parks, the ABC television network and several cable channels as well as a professional hockey team. A bitter public dust-up with Roy E. Disney Roy Edward Disney, KCSG, (born January 10, 1930) was a longtime senior executive for The Walt Disney Company, which his father Roy Oliver Disney and his uncle Walt founded. , nephew of company founder Walt Disney, resulted in Roy Disney's ouster ouster n. 1) the wrongful dispossession (putting out) of a rightful owner or tenant of real property, forcing the party pushed out of the premises to bring a lawsuit to regain possession. from the company board of trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. last year and his resignation as one of Disney's top executives. He and Stanley Gold, another former board member, have since become Eisner's most vocal critics and are engaged in a high-profile effort to have him step down. Analyst Kevin Calabrese at Argus Research Corp. in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of thinks Disney directors are indeed going to feel pressure from shareholders for change. ``It's not just the two management factions,'' he said. ``Eisner has made an awful lot of headlines, very few of them flattering, in the past few years.'' Roy Disney and Gold were highly critical of the company's failure last month to reach an agreement to extend its pact with Pixar Animation Studios and placed the blame squarely on Eisner's shoulders. Disney's traditional animation, the foundation on which the company was built, is widely seen as being in the shadow of the Pixar successes. In a statement, Roy Disney and Gold said the Comcast presentation highlights many of the same issues that they have been raising for several weeks with shareholders in their anti-Eisner campaign: animation, theme parks, the struggling ABC ABC in full American Broadcasting Co. Major U.S. television network. It began when the expanding national radio network NBC split into the separate Red and Blue networks in 1928. broadcast network and the ABC cable channel. They believe troubles in those areas have made Disney ``an attractive target.'' ``We have long maintained that the inherent value in Disney's assets has not been realized by current management and that (the Disney board of directors) has failed to take the necessary steps to restore long-term shareholder value and to hold management accountable for its failures,'' they stated. Roy Disney and Gold were further buoyed by a statement from fund adviser Institutional Shareholder Services on Wednesday recommending that shareholders vote against re-electing Eisner to Disney's board of directors at their annual meeting to be held March 3. The ISS ISS See Institutional Shareholder Services (ISS). called Disney ``the poster child'' for making the case for separating the roles of chairman and chief executive officer. Eisner came under fire last year for the ouster of his critics Roy Disney and Andrea Van de Kamp. Both claim that Eisner orchestrated their removal in an attempt to fill the board with his supporters and to muzzle criticism. ``While Mr. Eisner may be trying, he still hasn't gotten it right,'' ISS said. ``Sadly, it has often appeared that reconstituting the board was more aimed at quieting healthy boardroom dissent rather than creating it.'' The ISS recommendation was labeled ``inexplicable and unjustified'' by Disney officials. The company stated that Eisner led the very changes that resulted in a board dominated by independent directors. ``The Walt Disney board exceeds the guidelines set by the NYSE NYSE See: New York Stock Exchange with respect to corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. standards and this would not have been possible without Michael Eisner's commitment to governance and transparency,'' the company stated. Federal Communications Commission Federal Communications Commission (FCC), independent executive agency of the U.S. government established in 1934 to regulate interstate and foreign communications in the public interest. Chairman Michael Powell, asked about the possible merger during a congressional hearing Wednesday, promised close scrutiny of it if things move forward. ``I don't know Don't know (DK, DKed) "Don't know the trade." A Street expression used whenever one party lacks knowledge of a trade or receives conflicting instructions from the other party. if Comcast will get Disney or not,'' Powell said. ``If it does, a merger of that magnitude will unquestionably un·ques·tion·a·ble adj. Beyond question or doubt. See Synonyms at authentic. un·ques  tion·a·bil go through the finest filter at the commission, I can
assure you, as possible.''
In his letter to Eisner, Roberts wrote that he has analyzed all issues associated with regulatory approval and is confident that the necessary approvals could be obtained in a timely fashion. Greg Hernandez, (818) 713-3758 greg.hernandez(at)dailynews.com CAPTION(S): 2 drawings, 4 photos Drawing: (1 -- color) no caption (Michael Eisner) (2 -- color) no caption (Brian Roberts) Photo: (1 -- 4 -- color) no caption (photo collage) Jorge Irribarren and Jon Gerung/Staff Artists |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion