Comcast's Hostile Bid Spurned by Disney Directors

17 February 2004

Meeting in emergency session Monday night, the board of Walt Disney Company spurned the unsolicited takeover bid by cable giant Comcast Corporation. The rejection was unanimous, as was the board's vote of confidence in its much criticized chairman/ceo Michael Eisner.

The bid, total value an eyewatering $59.87 billion (€46.68bn; £31.56bn), includes the assumption of $11.9bm in Disney debt -- an offer which despite the unanimous thumbs-down Comcast still regards as "a sound and compelling proposition for both sets of shareholders".

A Comcast spokeswoman last night insisted that the bid "reflects a full and generous valuation [at] a significant premium over Disney's unaffected share price during any relevant measurement period over the last three years".

But even if Disney directors are unimpressed by the Comcast offer, the same may not be true for some of Mickey's larger shareholders. In particular the former Disney directors, Roy E Disney and Stanley Gold, both of whom staged a flounce-out from the Disney board late last year amid acrimony and vehement criticism of Eisner [WAMN: 02-Dec-03].

They have continued to snipe from the sidelines both at Eisner and the company's fiscal performance, although the Disney duo and Comcast insist there has been no collusion. But on the basis that 'my enemy's enemy is my friend', the parties are likely to find much in common, especially in the run-up to Disney's annual meeting on March 3.

The meeting, which by a wondrous stroke of irony will this year be held in Comcast's home town, Philadelphia, is likely to see fireworks, mostly orchestrated by Roy Disney and Gold. The pair plan a campaign to persuade shareholders they should not re-elect Eisner as chairman/ceo -- a sentiment with which Comcast is unlikely to disagree.

But Comcast is playing it cool, preferring to focus its merger arguments on lateral benefits rather than personal animosity. Says ceo Brian Roberts: "This is not about Michael Eisner or Roy Disney. This is about presenting a compelling vision to combine two great companies into one premier entertainment and communications company ... [cue heavenly choir]"

Some media observers, however, believe it no coincidence that Roberts, a savvy tactician, struck with his bid just one month prior to the Disney annual meeting. A programming masterstroke that allows little time for the Disney board to pull up the drawbridge and gives shareholders a cogent alternative to the Eisner management regime.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff