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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?"
Further, I do not believe that they are terribly crazy about Eisner anymore even though they throw him a bone (for now) when they say "(The board) has confidence in the business, financial and creative direction of Disney under the leadership of Michael Eisner and his management team." They will gladly jettison Eisner when they have a "...legitimate proposal."
Happy Trails!
Erick
http://www.busyweather.com/
With Pixar being lead by "You know who" , will MS buy Disney .... (we'll see Mickey mouse using windows soon....)
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!
I'm not sure I'd have any desire to go to Comcast World.
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.
Eat recycled food - it's good for the environment, and OK for you.
When Comcast asks Gates to start waving money under their shareholders noses, Eisner will be out on his ass before you can say "Takeover". Disney can do this the hard way or the easy way, but in the end, everyone has their price. I hope Eisner developed some hobbies outside of Disney, cause the target on his back is a mile wide, and just a few bucks short.
I thought they did consider it... just because they rejected it doesn't mean they didn't consider it, right?
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.
-- I'd give my right arm to be ambidextrous
Well, it's a good thing Disney turned it down. If they hadn't, it would have been like joining Beauty with the Beast. Having two huge companies like that would have created A Whole New World, and who knows what problems that would have caused!
Seriously, though, Disney is going to have Be Prepared for the future -- who knows where it's going to take them...with their animation studio pretty much in shambles. Until they figure out what to do, though, it's just Hakuna Matata!
Okay...I tried...
It was already clear that the board of directors wasn't going to like this deal. That's why Comcast went public with their offer, to try to sway the individual shareholders to elect Comcast-takeover-friendly executives and try to take over the board.
Good luck, Comcast. I think you'll need it...
The directors of a company have a legal obligation to consider the shareholders of their company. So they will always '...carefully consider any legitimate proposal...' whether they like the sound of it or not. In fact it is hard for the directors to recommend against a sufficiently high offer.
Read Epic the first RPG novel.
Does this mean that they did not believe Comcast's offer to be legitimate?
Sure, if you take it at face value. The reason Comcast's offer wasn't "legitimate" was because it was not Disney's idea to begin with. Disney's shareholders and officeholders will receive a much better deal in an acquisition where every decision-making individual involved can be sure that he will receive his fair share of the loot that flies up in the air and is up for grabs in these situations. That wasn't the case here, where basically Comcast caught Disney off guard, with their lawyers sleeping.
This is by no means the end of merger-talk between Comcast and Disney. It is the dream of every entertainment conglomerate to someday fuse with every other entertainment conglomerate in existence, and neither Disney nor Comcast can be expected to ignore all that "synergy". Stunts like this are part of the mating ritual. This is the first part of a long mating dance that ends in a new corporate logo, a new round of strange commercials repeating a weird logo that makes no sense, and several thousand layoffs.
Gates owns 7 percent of Comcast. They've got the money if they need it.
That phrase is probably a hedge against lawsuits. If the board did not give the appearance of considering offers, then that would leave them open to lawsuits by shareholders for breach of duties.
The board didn't go with the Comcast offer just because Comcast's bid pushed Disney's share price up. I'm pretty sure that the board will sing a different tune about Eisner once they receive high enough bid.
1f u c4n r34d th1s u r34lly n33d t0 g37 l41d
M I C
K E Y
C A B L E
No mandatory goofy screensavers. Thank you god.
-- http://www.criticalassets.com
I just watched Wall Street with Mike Douglas and Charlie Sheen and I finally have a clear idea of what these takeovers are about and how they are executed.
Basically, the target has some sort of attractive feature which can be achieved by the clever cutting off of unnecessary features. The entity that is attempting to take over the target is trying to get enough control over it that it can dictate the elimination of those unnecessary features. Typically the top tier of management of the target is completely replaced by the takeover entity's management appointments.
Takeover's aren't attempted because of any altruistic motive on the entity's part. Comcast wasn't interested in making Disney a stronger company, only to milk the Disney company of it's properties and eventually spin it off once it becomes unprofitable again.
As much as I hate the Mouse, I have to applaud them for sticking up for themselves and successfully resisting this hostile takeover.
I have been pwned because my
"So your offer's been rejected, congratulations, Comcast! What are you going to do now?" "I'm going to Hostiletakeoverland!"
The general public usually forgets that the best mergers are not just about money (and stock price) they are also about synergies. The potential merger with Comcast brought some synergies to the table (an outlet for Disney programming and cheaper advertising space). But ultimately, the key synergy is missing: Disney's focus on family entertainment.
To the external public, Disney is the ultimate family company. The ability for Disney to remain a reconginized name in family entertainment is crucial to its continued success. What does Comcast bring to that image? A merger could potentially dilute the image that Disney has worked decades to develop. (In accounting terms: Disney has a LOT of Goowill).
What's ironic about all of this is that Disney's external image and internal culture are so different. Many former employees have complained about it being a glue factory (i.e. hire people and use them up). Benefits, especially family benefits, are not as competitive as other companies in the industry. And most importantly--Disney no longer creates most of its content--almost all of it is outsourced to other organizations (i.e. Pixar) or just re-telling of old Disney stories (Cinderella, etc).
Where are all the corn-ball comments about it being a Mickey Mouse deal and that it is just f***ing goofy.
It seems insurmountable for any organization to manage such a behemoth like Disney. Even, Disney itself.
<sig>no sig</sig>
... doesn't mean he's going to spend a limitless amount of money for Disney, or that he even seriously wants Disney. For all we know, he told the board exactly how much they could bid for Disney before he gets pissed and votes his 7% against the whole proposal.
-- I'd give my right arm to be ambidextrous
Do the senators that disney keeps buying to extend the copyright periods come with this deal or will Comcast have to purchase them seperatly?
How about Phil Collins and Elton John?
Microsoft invested $1 billion in Comcast back in 1997 and owns quite a bit of Comcast.
Where is Disney's next big movie going to come from? They've closed down their Florida studio.
They've lost pixar, and now they're getting in the news not for making animation but for corporate maneuvering.
Luckily for us at least we still have quality animation coming out of Japan, the rare gems coming from Warner Bros. (i.e. The Iron Giant) and the occasional Dreamworks film.
Quite personally I'd like to see Disney's slide be used as an opportuntiy for more adult themed animation to break into mainstream US culture, and with the success of spirited away, it's possible.
ce n'est pas un Sig.
we must ask ourselves:
WWWD?
If comcast were smart they would have bought up a lot of Disney shares quitly for a couple months and then made the announcement. Since investors bought Disney stocks pushing the price higher there would have been a nice little profit in selling off those stocks. Then, even if the trade doesn't go through you got money out of the deal. Now repeat this same thing a couple times per year and you either grow your company by buying the company or at least unloading thier stocks after announcing the buyout.
Disney's board of directors today turned down Comcast's hostile takeover bid,
I thought that hostile takeover meant that Comcast doesn't need Disney's board to accept anything.
LK
"Hi. This is my friend, Jack Shit, and you don't know him." - Lord Kano
If anything, Comcast is going to pay yet more money for Disney, thus potentially edging them closer to bankruptcy :) Thats is - if things don't work out. They could, and this would be a successful venture (Indeed, Merril Lynch essentially called it a match made in heaven). If not, say hello to AOL Time Warner Episode II.
For what it's worth, I think this deal is a disaster in the making; One of the most important parts of an acquisition, takeover, or merger is how to incorporate the cultures of the two companies involved.
Disney has a history of independence and a strong, distinctive, and unique culture. Thanks to Michael Eisner, Disney is no longer a theme park company with a little studio; it's mostly a content company. And in terms of content, it's the <I>people</I> who count; that's what Comcast is buying (Besides the hard assets in terms of channels, magazines, parks, etc.) - And hell, even the parks are truly driven by employees who are obsessed with bringing the world's happiest place to each and every person who walks through its gates.
So, can Comcast, a company with no track record of any "creativity" in the traditional sense of the word...
(1) Buy Disney against the wishes of its management, and
(2) Shake things up like they've promised, and
(3) Tell people who've done a job for a very long time what to do different, while
(4) Keeping good relations with the bulk of their creative executives and rank-and-file employees?
I don't think so.
If you think about it:
1) Disney recently released favorable results at their analysts meeting. This alone may be reason for the Disney board to believe they are worth more than Comcast's offer.
2) No doubt, it's all about power and control. Eisner has been well known for squashing dissent. I'm sure he won't want to go without a fight. Comcast, I'm sure, mainly wants to get a foothold in the media business, so they can better compete with media/cable conglomerates like Time-Warner.
3) I wonder if Roy Disney and Stanley Gold had anything to do with this takeover bid. For one thing, the timing is a bit interesting, and I'm sure Roy Disney would probably jump at the opportunity to try to help restore family control of Disney.
All this being said, I somehow don't think this merger will go any better than a lot of mergers that have happened lately, e.g., AOL-Time-Warner, or DiamlerChrysler.
plan a whole day for your Comcast World visit. If you want to see Mike the Cable Technician, he will only show up at some time between 9 AM and 5 PM, and you don't want to miss him.
You'd have to reschedule, and only Jebus knows how long that would take.
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!
Don't think that a small group of dedicated individuals can't change the world. It's the only thing that ever has.
I think you can safely rule out any more attempts at creativity from Warners - they laid most of their feature animation division off after Osmosis Jones, sold off their furniture, etc. Besides, Brad Bird, director of The Iron Giant, is at Pixar now.
Who did the animation for that latest, forgettable Looney Tunes/Live action feature? I believe a lot of that work was outsourced, just as they did in Space Jam...
I havn't seen anyboby comment that Comcast is big into porn and why that might be a reason Disney doesn't want to be swallowed up by them. Just a thought.
On the other hand Disney does do porn with the ass shots/nudity on NYPD Blue or the R rated movies made by the various movie production companies they own.
I thought they did consider it... just because they rejected it doesn't mean they didn't consider it, right? :P
Well, Disney must have looked at the offer, and rejected it because it was clearly . . . Mickey Mouse.
Thank you. Thank you. Try the overpriced hamburgers and soggy fries while you wait to ride Splash Mountain.
Traditionally a hostile bid would be inexcess of the stock value unless the stock was over valued and mired in debt. They were formally asking if the board would take a legitimate offer seriously in a public and open fashion. Disney's response was they would take a bid that benefited their shareholders very seriously. It's like a suitor asking coyly if he happened to propose marriage would the offer be accepted or rejected? The stock just upped the anty but I'd be surprised if they didn't respond with a bid that was $3 to $5 dollars a share over current value. Even if the stock jumped by that much in the meantime Disney might go for it since the increase was a short term reaction to the offer and would likely drop again in the coming months. It's very telling that they stated public interest. Eisner might want to pack a few boxes and load up on office supplies.
Actually, I hope this merger goes through. For one, it'll sink Comcast so far in debt that investing in Time Warner stock will be considered a good investment among media companies. Second, Comcast will quickly dump the "ABC" Family Channel. It does not fit into the Disney/ABC content at all and was a stupid purchase to begin with. Third, Comcast might chuck the Disney animation channel and merge it with Time Warner's Cartoon Network, similar to what happened with the Comedy Channel and Ha many years ago (thus becoming Comedy Central). Fourth, the FCC and FTC might step in and make Comcast shed some of its cable markets. Ode to get Time Warner Cable here in Sacramento instead of Comcast. To think our city fathers passed on Warner/Amex Cable so many years ago because Warner didn't want to pay for our idiotic community access channel studios. To tell the truth, this cable market hasn't been good since AT&T Broadband got swallowed up in that monstrosity that is Comcast.
:)
If we had Time Warner Cable here, we'd probably have VoIP service through the cable company itself instead of through third-parties such as Vonage. We could have AOL or Earthlink as our "native" cable modem ISP instead of having to pay for email service through Comcast that probably none of us use (lets see, it was @home.com, then it was @attbi.com, and now its @comcast.net, great track record!). I also suspect my market would also have a greater emphasis on HDTV deployment and while it isn't TiVo, at least Time Warner Cable would offer some DVR options, unlike Comcast (and they even own a chunk of TiVo stock!).
So, for my very own selfish local reasons, I hope this convoluted merger goes through! May Comcast harvest the energy derived from the synergy of the AOL Time Warner merger!
"Right now, somewhere in this world, Scott Baio is plowing a woman he doesn't love," - Peter Griffin, *Family Guy*
umm.. no. It means they didn't accept it. They still considered it. AFTER considering it, they decided not to accept it.
Consider v. - To Think Carefully About
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
I've been hearing, for years, from people in the disney organisation about Eisner's childish tactics and thirst for power. The board is comprised of his yes men, they will do what he says. Roy Disney as much as said this in his letter of resignation http://savedisney.com/letters/ The other items in the letters section of Roy Disney's website http://savedisney.com will reenforce this.
Many of the problems now being publically brought up by Roy Disney and Stanley Gold are ones that I and people familiar with the internal workings of the Disney creative machine have been voicing for years. Eisner's got to go, for the good of the company.
I don't want to see Disney swallowed up by a large corporation. There's still time to turn it around and save it, but I do not beleive this will happen. I, personally, beleive that Disney will eventually be bought. I didn't expect it to happen, or even be contemplated, this soon, but I believe it is inevitable unless Eisner is outted and the company drastically changes course.
Between Comcast's attempted hostile takeover and Eisner's complete alienation of most of the core historical Disney management team, I reluctantly decided to dump all the Disney stock I had and take advantage of the inflated stock price. Eisner may have been able to help Disney over some rough times, but his style and approach is not good for Disney in the long term. Consequently, Comcast having majority ownership in the company would be an even greater disaster. This all signals to me that Disney is in for a dark period.
It's not thast they thought Comcast's bit wasn't legitimate, it's that it wasn't high enough.
Never eat more than you can lift -- Miss Piggy
This is not the first time this has happened to Disney.
Back around 1980, Disney was having trouble. They hadn't had a hit movie in years, and the newly opened EPCOT Center wasn't the big tourist draw that had been anticipated. The sharks on Wall Street were beginning to circle. A speculative investor named Saul Steinberg attempted a leveraged buy-out of Disney. Disney tried many strategies to fend him off, and ultimately ended up paying him to go away by buying back his shares at a premium price (known on Wall Street as, "greenmail").
Realizing that there was nothing preventing this from happening again, the board took drastic measures. They discharged the CEO of Disney, Ron Miller, and replaced him with... Michael Eisner. Eisner, together with Frank Wells, rebuilt Disney into the powerhouse that, paradoxically, was always there.
Today, we find that Disney hasn't had a hit movie (of its own) in years, and Disneyland California Adventure hasn't been the big tourist draw that was anticipated. And while a third-rate cable company with delusions of grandeur hardly conjures up the same sordid imagery as a soulless Wall Street raider, the similarities between Disney's situation in the early 1980's and now are eerie. Right down to Roy Disney's displeasure with the whole situation.
For a more complete story of what happened, go find yourself a copy of the book Storming The Magic Kingdom . Sounds like Eisner could use a copy right now...
Schwab
Editor, A1-AAA AmeriCaptions
"Besides who would go to Comcast World?"
Maybe the same people who go to 3Com Stadium, or Safeco Field, or Busch Seaworld, or...
Kip Hawley is an idiot.
The Economist has an article which outlines what the previous post describes and describes how Mr Eisner is now probably the problem.
Does this mean that they did not believe Comcast's offer to be legitimate?
Thats business speak. It just means it wasn't enough (big enough, good enough, whatever) not that it wasn't legitimate (given enought greenbacks almost anything becomes legitimate;-)).
Quack, quack.
Man, I was kinda looking forward to this: Since Bill has a stake on Comcast, maybe he could have gotten some of the rights to Disney cartoon characters, and incorporated them into Windows?
Imagine if every time an application crashed, the Rescue Rangers came and helped you restart it.
Or replacing Clippy with Donald Duck, and then buying the Donald-to-English translator for only $49.95.
Or instead of seeing that horribly drawn comic dog in the Search menu, we actually got to see an animated Pluto?
The board "turned down" a hostile takeover bid? Isn't the whole idea of a hostile takeover that the current board doesn't want to go along with it? If the board agreed, then it would be more of an "amenable takeover" or something.
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Judging by, among others, these articles in Slate (here and here); these articles regarding an Eisner biography (here and here); this little gossipy titbit; and this critical letter of resignation from Roy E. Disney, the dissatisfaction with Eisner seems to have been brewing for quite some time.
The liver is evil and must be punished.
Does this mean you didn't read the article which you yourself submitted (which explains perfectly out-of-context quote)
Outsourcing doesn't just happen in I.T. of course...
Two key points:
- Comcast will probably up their bid to around $30 per share (or perhaps include more cash instead of a simple stock swap). Analysts don't support a stock price much higher than that.
- Disney board members were hit with at least a half-dozen shareholder lawsuits filed in Los Angeles Superior Court late last week. The suits claim that Eisner, Disney president and chief operating officer Robert Iger and the rest of the board breached their fiduciary duty by failing to give adequate consideration to Comcast's offer in order to entrench themselves in their jobs.
So should Comcast walk away if Disney doesn't bite? Perhaps -- no need throwing more money down the rabbit hole (or mouse hole, in this case). Are there others who could make a run for Disney? Let's see.... Viacom has been mentioned, but ignoring the fact that they already own CBS for a moment, they've stated that they're not interested. GE is in the same boat as Viacom, but in the NBC camp. Time Warner is certainly an option, but would have to figure out which movie studio to keep in order to avoid antitrust issues. There's the "we pay cash" option with Microsoft, but that doesn't make sense unless there was a third player involved, and we all know that Microsoft wouldn't want to partner up with Steve Jobs at Pixar.... would they? Hmmmmm....(there are other suitors mentioned in the above LATimes link, removal of pants required)
This certainly will make this next day/week fairly interesting for a few people.
As a Disney stock owner, I'm personally glad that Disney did not agree to Comcast's hostile bid. Many analysts and regular shareholders alike (like myself) think that Disney's stock is already undervalued. If Disney had accepted this bid, they would have been accepting much less per share than what their (already undervalued) stock is currently trading for. I do not think that this is an issue about Roy Disney and Stanley gold being "right", I do not think it's an issue with Eisner being the "bad guy", I simply think that at the end of the day all that matters is money. Comcast simply didn't put enough of it on the table, and that is why Disney did not accept the bid.
By law, public companies are required to consider "every legitimate offer". In fact, they are required to consider "every offer", whether it's legitimate or not.
What will be more interesting that what Comcast or Disney do is what the FCC does. The FCC and FTC both should scuttle this deal because when you marry one of the largest cable companies with one of the largest content producers, what you have is a monopoly. Comcast is trying to out-Time Warner, Time Warner.
The deal is bad for competition, bad for freedom of the press, bad for Disney, and worst of all, bad for shareholders. So who's getting rich off this offer (right now)?
I think he was complled to make the choice because of the failure of @home internet service. They were looking for a new customer base and Disney's 'innocent slate' was a good idea.
...don't question it!!!