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Living and Loving Windermere!
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Let's keep our fingers crossed that Comcast won't be able to follow through!
From today's Orlando Sentinel:
Comcast Corp. is facing increasing doubt among investors that its bid for Walt Disney Co. can succeed, as the cable giant's stock languishes and the value of its unsolicited offer remains well below Disney's market price.
Though it's early in the battle, even some longtime Comcast shareholders who favor a merger say they are skeptical that Comcast will win.
As Comcast shares fell Friday for the third straight day, "I thought, 'This thing doesn't get done,' " said Charles Sloan, a portfolio manager at Chicago-based Holland Capital Management, which owns 412,000 Comcast shares.
Many investors concede that they are reluctant to count out Comcast Chief Executive Officer Brian Roberts because of his record in building the company into the nation's largest cable provider.
His supporters recall that his patient approach to buying AT&T's cable business two years ago ultimately won out.
But some Comcast shareholders said Roberts may not have expected the reactions his bid would stir among Disney investors or among Comcast's investors.
The main problem so far is that Comcast stock has fallen while Disney shares have surged. The trends have sharply reduced the value of Comcast's offer of 0.78 of its shares for each Disney share.
Comcast may have gotten more breathing room Friday: The pace of decline in its stock slowed, as it slipped 16 cents to $29.90 on Nasdaq after falling $3.87 in the previous two days.
Disney shares, which jumped a total of $3.92 Wednesday and Thursday, slumped $1.08 to $26.92 on the New York Stock Exchange on Friday.
Still, the Comcast offer now values Disney at $23.32 a share -- 13 percent below Disney's share price.
Sources in the Comcast camp say they have sent a strong message to investors during the past two days that the company won't overpay for Disney, to avoid a serious "dilution" of existing Comcast holders' stakes. But many investors expect Roberts to be willing to raise his bid 10 percent to 15 percent.
Even a 15 percent boost, however, would lift the bid's value to just under Disney's closing stock price Friday. And if Comcast's own shares fall further on those dilution worries, the bid's value would decline in tandem.
Moreover, many Disney shareholders argue that the company is worth at least $30 a share. Unless Comcast's stock rises sharply -- or Roberts agrees to sweeten the bid -- a 15 percent increase in the stock-swap offer wouldn't come close to valuing Disney at that price.
Within the range of what Comcast is thought to be willing to pay, "the deal isn't going to get done here," said Alec Cutler, a managing director at money manager Brandywine Asset Management in Wilmington, Del., and an owner of Comcast and Disney shares.
Typically in a takeover situation, the shares of the acquirer initially decline while the target's shares rise. But the wide gulf between the value of Comcast's offer and the price of Disney's shares is unusual, Wall Street veterans said.
If Roberts had hoped that investors would flock to his stock, on a bet that his vision of a combined Comcast and Disney was a blockbuster, he underestimated the anger the bid has generated among some longtime Comcast shareholders, some analysts said.
Craig Moffett, an analyst who follows Comcast for investment research firm Sanford C. Bernstein, said many of his investor clients are "ripping mad" about the offer.
Sources in the Comcast camp insist there is no panic about investors' reaction and that Roberts expected that some Comcast investors would pull out of the stock.
"This isn't something that's going to be decided in two or three days," said Christopher Luck, a money manager at First Quadrant in Pasadena, Calif., which owns 4 million Comcast shares.
From today's Orlando Sentinel:
Comcast Corp. is facing increasing doubt among investors that its bid for Walt Disney Co. can succeed, as the cable giant's stock languishes and the value of its unsolicited offer remains well below Disney's market price.
Though it's early in the battle, even some longtime Comcast shareholders who favor a merger say they are skeptical that Comcast will win.
As Comcast shares fell Friday for the third straight day, "I thought, 'This thing doesn't get done,' " said Charles Sloan, a portfolio manager at Chicago-based Holland Capital Management, which owns 412,000 Comcast shares.
Many investors concede that they are reluctant to count out Comcast Chief Executive Officer Brian Roberts because of his record in building the company into the nation's largest cable provider.
His supporters recall that his patient approach to buying AT&T's cable business two years ago ultimately won out.
But some Comcast shareholders said Roberts may not have expected the reactions his bid would stir among Disney investors or among Comcast's investors.
The main problem so far is that Comcast stock has fallen while Disney shares have surged. The trends have sharply reduced the value of Comcast's offer of 0.78 of its shares for each Disney share.
Comcast may have gotten more breathing room Friday: The pace of decline in its stock slowed, as it slipped 16 cents to $29.90 on Nasdaq after falling $3.87 in the previous two days.
Disney shares, which jumped a total of $3.92 Wednesday and Thursday, slumped $1.08 to $26.92 on the New York Stock Exchange on Friday.
Still, the Comcast offer now values Disney at $23.32 a share -- 13 percent below Disney's share price.
Sources in the Comcast camp say they have sent a strong message to investors during the past two days that the company won't overpay for Disney, to avoid a serious "dilution" of existing Comcast holders' stakes. But many investors expect Roberts to be willing to raise his bid 10 percent to 15 percent.
Even a 15 percent boost, however, would lift the bid's value to just under Disney's closing stock price Friday. And if Comcast's own shares fall further on those dilution worries, the bid's value would decline in tandem.
Moreover, many Disney shareholders argue that the company is worth at least $30 a share. Unless Comcast's stock rises sharply -- or Roberts agrees to sweeten the bid -- a 15 percent increase in the stock-swap offer wouldn't come close to valuing Disney at that price.
Within the range of what Comcast is thought to be willing to pay, "the deal isn't going to get done here," said Alec Cutler, a managing director at money manager Brandywine Asset Management in Wilmington, Del., and an owner of Comcast and Disney shares.
Typically in a takeover situation, the shares of the acquirer initially decline while the target's shares rise. But the wide gulf between the value of Comcast's offer and the price of Disney's shares is unusual, Wall Street veterans said.
If Roberts had hoped that investors would flock to his stock, on a bet that his vision of a combined Comcast and Disney was a blockbuster, he underestimated the anger the bid has generated among some longtime Comcast shareholders, some analysts said.
Craig Moffett, an analyst who follows Comcast for investment research firm Sanford C. Bernstein, said many of his investor clients are "ripping mad" about the offer.
Sources in the Comcast camp insist there is no panic about investors' reaction and that Roberts expected that some Comcast investors would pull out of the stock.
"This isn't something that's going to be decided in two or three days," said Christopher Luck, a money manager at First Quadrant in Pasadena, Calif., which owns 4 million Comcast shares.
