Is the Disney takeover already dead?

[tink2dw]

Is the Disney takeover already dead?

Disney's board rejects the hostile takeover bid from Comcast, and a source tells Reuters that the cable giant may be priced out. Is the fight over -- or just beginning?

Is Comcast (CMCSA, news, msgs) already surrendering its fight to wrest the Magic Kingdom from Walt Disney (DIS, news, msgs) CEO Michael Eisner?

Reuters, quoting a source close to the company, reports today that the cable giant won't raise its all-stock offer for Disney, now valued at about $48.8 million.

It also won't back an effort, known as a consent shareholder solicitation, to try to replace some Disney board members at the company's March 3 shareholder meeting.

"We are not interested in Disney at the current price levels,'' the source told Reuters. "Obviously, if we're not interested in Disney at these prices, we're not going to run a consent solicitation."

Those statements could be part of a bargaining strategy. Or, one analyst suggests, they could be a sign Comcast "overestimated its position" and expected the deal would be an easier sell to Disney shareholders.

"Either way," Paul Kim, analyst for Tradition Asiel Securities, said on CNBC, "Comcast is in a no-win situation where they will have to chase a higher price."

Disney board says no
The deal would bring Disney’s movie studios, ABC television, ESPN cable network and theme parks together with Comcast’s 21 million cable subscriber base, the biggest in the United States.

That would create an entertainment giant to compete against the top media and distribution companies like Time Warner (TWX, news, msgs) and News Corp. (NWS, news, msgs).

Disney's board officially rejected Comcast's takeover bid late Monday, though it apparently left the door open for another offer. The board said it is backing CEO Eisner and dismissed the Comcast offer as “too low.” Disney’s board said it would consider any “legitimate proposal.”

But Reuters, citing a source close to Comcast, reports that the cable giant isn't interested in a Disney deal at current stock prices. When news of Comcast's hostile bid broke last week, Disney stock soared while Comcast shares fell. That made the deal potentially a lot more costly.

Price becomes a problem
Comcast initially defended its offer as fair and a benefit for both companies. But it has certainly hit a serious pricing snag.

When Comcast initially offered its hostile bid for Disney, it represented a 10% premium above the price of Disney shares. But Disney's stock soared on the news and Comcast's fell, more than erasing that premium.

Analysts have said from the start that Comcast would need to raise its offer or sweeten it with cash to get the deal done. And various analysts have valued Disney at more than $30 in recent days, above its current share price -- making the deal richer still.

If Comcast truly isn't willing to raise its price, the deal could be dead. But last rites will have to wait a bit longer. CNBC reports that Comcast is likely to bide its time until after the Disney shareholder meeting, which seems certain to be at least entertaining. The Disney family, lead by former board member Roy Disney, is pushing a shareholder rebellion designed to oust Eisner.

The meeting is being held in Philadelphia, where Comcast is headquartered. But the source told Reuters that Comcast will steer clear. "This has never been about Mr. Eisner," the source said, "It has been about maximizing value for the shareholders for both companies."

 

[CheapMom]

Disney said they would consider a sweeter offer.

 

[Blondiex46]

yea so the question is "if they sell DW to someone else, will you continue to go"? I am not sure that I would. I love the idea that they own it and figure that because of their reputation among other things, they would keep it the way it always has, but for soneone else to run it, don't think (could be wrong) that it would be the same, What do you all think?

 

[HaleyB]

I think that is the million dollar question. I think comcast would try to sell the parks, they want the other assests.

 

[DianeV]

Why would Comcast want to sell the parks? They have already made statements about improvements to the parks. Head of Comcast worked for Disney for 14 years (or maybe 12)

As far as who "owns" it you realize the Disney family has not "owned" it for a while and in fact Roy has been kicked to the curb recently?

As I have posted before please check out www.savingdisney.com to get a much better idea of what is really going on

 

[HaleyB]

I beleive it is www.savedisney.com
I do think Comcast would unload the parks. It is standard practice in hostile takeovers to cherry pick assets and sell off the rest. However, I am not on the Comcast board so it is obviously speculation on my part. Aside from the 76ers all of Comcasts key holdings are midia related, Comcast Communications (cable), the Golf network, and E! so I am guessing that it is Walt Disney Pictures, ESPN, and ABC that they are interested in.

 

[DianeV]

Yup, you are right. ITs www.savedisney.com

I dont know about the parks. I only know what I read and that was about some ideas for improvements..

 

[MEM]

Michael Eisner is supposed to be on Larry King tonight at 9:00 EST. You can be sure Larry will ask him about the takeover bid!

 

[DianeV]

Oh I hope so! I will have to make sure to watch how this weasel handles it.

 

[han1211]

I know we all have our fond memories about WDW and such, but in all reality Disney Corp. is not owned by a Disney now. It is owned by stockholders and is being run by Mr. Eisner.
In all honesty, we want WDW to be what our foggy memories remember it to be. It may have never really been that way in the first place, but if it was, it hasn't seen Walt in it for some 3 decades.
I dearly love Disney World, but if a better run company has the ability to help make it stronger so be it. One stockholder is very little different from another. As long as they continue to offer the same family oriented entertainment then most of us will still spend our hard earned money with the Mouse and his pals.
I personally hope Roy gets managing control of the corporation. There is just something right about a family business being run by a family member. It has worked for Ford to have a Ford running it again, maybe it would help Disney as well.

 

[WDSearcher]

Originally posted by han1211
I know we all have our fond memories about WDW and such, but in all reality Disney Corp. is not owned by a Disney now. It is owned by stockholders .....

which include ROY DISNEY. Not to mention the stock that Diane Disney owns ... and I assume that Roy's kids have had stock portfolios since they were small as well. So, technically, Disney is still owned by a Disney. By several of them, actually. In addition to many, many others.

The Walt Disney Company hasn't been owned totally by Disney since the first stock was sold in 1940. And it pretty much ceased being owned primarily by Disney when it became listed on the NYSE in 1957. The decision to sell stock to bring in funds for development was Walt's. Granted, people like the Bass Brothers, various foreign millionaire princes, Michael Eisner, and even Shamrock Investments have exploited that decision, but Walt was the one who went public.

 

[han1211]

In addition to many, many others.

Many, many stockholders, help to bring dreams to reality for many, many of us.

Exactly my point.
I too wear rose colored glasses when it comes to things Disney
I love Disney and some of my fondest memories include times spent at WDW. But if one group of stock holders can provide the capital for Disney to continue to help us capture a few more carefree moments of childhood bliss. ok