Comcast Wants To Buy Disney For $66 Billion

BenBenBen writes "Comcast have made a surprise $66 billion bid for Disney. The public bid (aimed at swaying shareholders) follows a period of secret negotiation which resulted in Eisner saying no. Comcast has a statement on their website and there is better coverage available here."

Comments

Hostile takeover?

[jaf]

Curious.. is this what's called a hostile takeover?

Re:Hostile takeover?

[PunkPig]

So Comcast buys Disney, keeps all of Disney's TV properties (ABC, ESPN, etc), and sells Pure Disney (Mickey, theme parks, etc) to Pixar+Roy Disney.

Re:Hostile takeover?

[AlecC]

Because that $66 billion doesn't really exist: it is just the hypothetical price tag on the assets which the buyer is offering the shareholders of the company they want to buy. Much of it is probably new stock of their own which they intend to print to give the shareholders they buy out. If bidder and target are both trading at $10.00, the budder may be offering 13 of their shares for 10 of the originals. You can set a stock market price on these shares, but you couldn't eactually get the money out of the stock market: if you tried selling that many shares the stock price would plummet.

There is often a cash element in the offer: but that cash is usually borrowed from banks secured against things the buyer owns, and needs to be paid back.

The stock market only works because the money goes round and round. Someone who makes a killing on the market doesn't take the money out in greenbacks. Either they re-invest it, or they deposit it in a bank, which reinvests it, or they buy things from people who reinvest it.

the whole financial system is a giant lie which we have all agreed to tell each other. You cannot take more than a certain amount out of it, or the Emperor will be revealed to have not clothes and the whole system will fall.

Re:Hostile takeover?

[The Original Yama]

" Heck, Bill has NEVER owned more than 50%. He and Paul Allen each had 50% to start with, until they went IPO. "

Not true:

"Bill Gates received 64 percent of Microsoft to Paul Allen's 36 percent, which explains why Gates is the richest man in the world and Allen is only number two or three on the list."

Question from non-usa

[selderrr]

from their website, they seem to be a cable provider, but can one of you natives inform us, foreigners, how big comcast exactly is ?`br~ A Disney takeover by a cable company seems rather over-the-top

Re:Question from non-usa

[Tassach]

IIRC, Microsoft is already the largest Comcast shareholder, owning approximately 33% of the company last time I checked. BillG owns another substantial chunk of Comcast stock under his own name, too. I remember reading that all the major Microsoft insiders were investing heavily in cable companies.

Good Investment?

[z0ink]

With the death of their traditional 2d animation studio and Pixas leaving is Disney really an investment anymore? I don't think Disney World is worth 66 billion.

Re:Good Investment?

[leifm]

I'd guess they really want the TV properties Disney holds, as a cable company owning ESPN can't be a bad thing.

Someone should check the facts..

[vpscolo]

"Disney is one of the world's biggest and best known media companies, and is responsible for everything from Mickey Mouse cartoons to blockbuster movies such as Toy Story."

But Pixar made Toy Story, Disney just published it and Pixar have just dropped Disney. Almost like rats (mice) leaving a sinking ship

Rus

Re:Someone should check the facts..

[tinrobot]

Actually, Disney owns the copyright to Toy Story, the characters and the merchandising rights. They own all of the Pixar films to date. If Disney wants to, they could make Finding Nemo II all by themselves.

The deal with Pixar was that Disney owns the films and pays for distribution, the two companies split production costs 50/50, but Pixar only gets 35% of the back end.

No wonder Pixar's shopping elsewhere.

Expansion

[lukewarmfusion]

Comcast is expanding fast - too fast, perhaps. They bought out the AT&T service here in my area. I'm not sure of all the details of that merger/purchase/whatever, but our service went from expensive to holy crap in no time. Also, they're ridiculous about support and customer service. I don't expect them to improve the state of Disney at all if this thing works out for them. Was going to post: If you want to buy Disney, there's a whole store at the mall selling them.

Re:deja-vu^WAOL-Time-Warner all over again

[TopShelf]

The difference here is the cable TV aspect, however. If Comcast buys Disney, which includes ESPN, for example, you can bet that competitors to ESPN (i.e. Fox Sports) will get 2nd class treatment on their systems. If I recall correctly, isn't something like this the case in Philadelphia, where Comcast owns the Flyers, but if you have some other service, you can't get most of their games on TV?

Sounds like way too much to me

[Andy_R]

Given that Disney just lost their main content supplier (Pixar), and are creatively running on empty (Atlantis, Lilo and Stitch, dozens of straight to video cash-in sequels to classics anyone?), this seems like a lot of money for a chain of shops, a few theme parks and a stack of about-to-go-out-of-copyright cartoon characters.

Pixar have shown a start-up can outdo Disney at animation, Universal and Busch have shown the theme parks are cost effective to build from scratch, and the shops are nothing special.

Great for M$

[EmagGeek]

Since M$ owns much of if not a majority stake in Comcast, this is a great way for them to get into a position to dominate media distribution like they've always wanted to... Don't forget that M$ led a drive to make "high definition" television 640x480, which is lower resolution than analog tv, just for their own benefit.

They're salivating over the chance to get their DRM-hooks into a big media company..

Re:That blows my own cover now...

[iamsure]

The truly sad part is that Microsoft could buy Disney at the same price, and only have to use $10B in stock. They have roughly $50B in cash available.

In other words, if the price was lower, Microsoft could buy Disney without changing ANYTHING in their business. Zero impact, other than availabl cash.

Thats absolute insanity.

Conflict of Interest?

[Silwenae]

I'd be suprised if the FCC / SEC let this go through. There seem to be too many conflicts of interest in a cable company owning a content creator.

As far as I understand, cable providers pay (and pass on those costs to customers) for channels like ESPN (which just raised how much they charge cable companies because of ESPN-HD, and had some fights with other cable companies about those rates) and having one company who creates TV shows (for ABC and others) and movies (Disney & Touchstone).

Wouldn't Comcast be able to give themselves exclusive content, whether it's a ESPN channel, first run of pay per view movies created by Disney et al, or save on syndication rights on Comcast / Disney run stations? How many times have we seen actors sue over syndication rights when a company like Fox only syndicates to FX? (Or ABC to ABC Family, etc).

And I have a hard time believing that Comcast would pass on those savings (creation & distribution) to their cable customers.

Re:Comcast and Disney

[m00nun1t]

It's not about how much cash you have. If Disney is a good investment, then investors/merchant banks will provide the money. If the investors/merchant banks believe under the new management that Disney is capable of making enough profit (or ComCast increase their profit enough) to cover the loan, then they will cough up the money.

In the 80's it wasn't that unusual for companies to buy out other companies larger than themselves. Probably still happens today.

What are you going to do next?

[callipygian-showsyst]

You've just won the Superbowl! What are you going to do next?

"We're going to COMCASTLand!

Seriously, I've worked for the Walt Disney Company through thick and thin. I stuck with them when they flushed millions of $$$ down their dot-com debacle (and made me work with usavory characters like Patrick Naughton. I've been laid off (on my 40th birthay) and hired back. They've tried to replace me with people half my age (and wanted me to train them!).

But I've stuck with them because I believed in the "concept" of the Walt Disney Conpany, even if I didn't have complete faith in the current administration. I just liked Disney.

I hope Comcast knows what they're doing!