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Disney Board Turns Down Comcast Takeover Bid
scifience writes "Disney's board of directors today turned down Comcast's hostile takeover bid, reports MSNBC. The board expressed confidence in Eisner's leadership. One interesting quote released by the board is that they will, '...carefully consider any legitimate proposal...' Does this mean that they did not believe Comcast's offer to be legitimate?"
Neither the camp that supports Eisner nor the camp that wants to depose Eisner and take over the company themselves is going to vote in favor of Comcast taking over. Finally, an issue the two groups can unite on!
My local paper (Philadelphia Daily News) ran a comparison recently between the two - in terms of revenue, Disney grossed 50% more than Comcast, which is less than I would have thought. Comcast has cable companies in 41 states, and the Disney op does not have substantially more personnel than Comcast. Doesn;t mean a hill of beans when you start crunching numbers, but it showed me that Comcast has more muscle than I thought they did, and that the second round might be the one if they can cough up some more cash.
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A) They like the amount Comcast offered, but don't think Comcast has the realistic ability to scrape together that kind of bread
B) They want to fan the flames a little to see who else wants to pony up for a ride on the You bid, they bid, we get back to you, then let's repeat.. train. Considering what's going on between Cingular and Vodaphone over ATT Wireless right now, I can't say I'd be surprised if that's their motivation.
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Microsoft invested $1 billion in Comcast back in 1997 and owns quite a bit of Comcast.
When Mike Jitlov worked for Disney doing special effects, he found their culture so regimented and stiff that he started calling it "Mauswitz." This started to catch on, but the PHB's made it a firing offense. He then changed it to "Duckau," which was, oddly enough, acceptable.
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The reason Comcast went "public" with the buyout information, is because Eisner privately turned down the bid.
The reason the board turned down the bid, is because they are getting bigger private offers (that we don't yet know about).
I, however, do know of one "major" media-up-and-coming-conglomorate that is making a bid. (Yes, they already have their own "mouse" [and protocol]).
MS-NBC-ATT-Viacom-Disney-Studios anyone?
Here's my prediction of the new MS-MPAA movie formula:
A love affair will acrue between a wholesome Microsoft user and a debaucherous Mac-using whore. He'll pretend that he cares about her and he'll drive her to the hotel room in his Microsoft-powered-Lotus-Espirit. He'll flaunt her around at big events, like [w]horse races, etc... and she'll realize that she's just a lowly MAC user! He'll undoubtedly comfort her by spending an incredible amount of money to convince her that Windows is better for sluts [that have some form of confidence].
Using cool special effects, she'll turn out to be an alien and the ATT-Disney Animation-Viacom-Studios fun will begin!
[I don't want to ruin the ending; but I'll bet you can guess who get fscked at the end of this flick]
Every day will seem like Independence Day!
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I'm willing to bet Jobs will join forces with Comcast to take back Disney from M.E. or Fox News said today Pixar could get the money to do buyout of Disney. Either way Eisner is on his way out.
I've been a shareholder in DIS since the 1970's and have weathered other potential takeover storms.
The reason this one is different from the one 20 years ago is that I think the potential buyer has in mind the protection of the longterm value of the Disney brand and its associated assets. This brings benefit to shareholders beyond any premium in share price that might be offered. (If you don't know, many shareholders are somewhat concerned that the current Disney management team is focusing more on short-term profits than long-term value ... and if you need a lesson as to why that's not the best approach, I'm guessing you're not an ex-dot-com'er.)
In the case of the animation business which has arguably languished lately (closure of animation facility in Florida for example; also a focus on computer rather than hand animation), Comcast seems interested in bringing it to the forefront again. Whether that be through further investment on their part, or selling it off to a creative company like Pixar which could make the most of it, I can only see positive results compared to what's been going on recently here.
In the case of the theme parks, which have experienced reduced maintenance budgets and a serious slowdown in the number of new "big ticket" attractions developed in the past 5 years or so, again I can only see that a change would bring better stewardship of key company assets. Even if it meant selling off or leasing for operation the parks to a company like Six Flags, asking myself if "will the standard for the parks as it currently exists be lowered or raised?", my gut reaction is that it will at worst stay the same.
Anyway, usual caveats here -- not speaking on behalf of ANYONE except myself, and yes, I'm a stockholder in DIS who's in it for the long haul
Do I think you're insightful merely because I agree with you, and was preparing a similar comment? Maybe.
The 'Economist' has forgotten some bits of economic theory in favor of financial instruments. Plain and simple. A price expresses value only at the time of a transaction. There are millions of transactions of Disney stock on a daily basis that show, as of today, that the Economist article, no matter what formulae they use, is wrong.
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