This could be VERY BAD news.....

[roymccoy]

I saw this today in the financials. I saw this same kind of thing in 1984, but Eisner and Wells were brought in and saved the company. Who will be brought in this time...and in this economic climate?

http://biz.yahoo.com/rf/010926/n26178657_1.html

Roy :-(

 

[YoHo]

I would say its safer now then before the attacks. the Article highlights some of the problems inherent with a corprate takeoer. Mainly that Disney is a company steeped in family traditions. The article also highlighted that now is simply not the right time to be talking corporate takeover. Disney would have to be slipping far further down the slope before a hostile takeover would be viewed as a good thing.

 

[roymccoy]

You tellin' me that you see ANYTHING rosy to report on this and the next quarter earnings report for Disney? I think we are just seeing the beginning of the gloom in tourism in the United States. Right now, the numbers and attendance are TERRIBLE and those trips were mostly planned BEFORE the terrible attacks. It's the NEXT quarter earnings that really have me scared. I bet bookings for future vacations are way down. The problem is, Disney's stock might not be worth as much as the company is to an investor. If the stock gets too much lower, someone will swoop in and buy up a controlling interest and basically take over. Now that the Bass family has had to sell off the majority of it's holdings, there is a lot of cheap Disney stock out there. I hope and pray that this isn't the case, but I have a nagging feeling that there are companies out there who think that Disney could be exploited even more and may want to add a quality company to their
family of companies.

Hope not.

Roy :-(

 

[YoHo]

No I'm saying that in the wake of the Disaster any Hostile buyer of Disney would be veiwed as as evil as the terrorists by Wall Street and the general public. That would be PR nightmare of huge proportions. So, I don't see it happening.

 

[roymccoy]

Yeah...I hope that's the case but I'm afraid that Americans are a fickle bunch that feels one way one minute and the opposite the next. Bush Sr. had a 90% approval rating and then lost to Bill Clinton a few months later. Americans have a short attention span and I'm afraid Disney will be at it's weakest, financially, when all of this terribleness will be a fading memory a few months from now. Don't get me wrong, I hope and pray that Disney can pull itself up and recover, but I'm in the financial business and I have seen this before. The storm clouds are brewing. They will either weather it or not.

 

[YoHo]

Well the other plus is that there aren't to many groups that are in a good position now. With Disney's Market Cap and such, There are only a few buyers that would bite. The hoped for October announcments could have a positive effect on Stock price.

 

[TiggerFreak]

I agree that any hostile takeover attempt in the near future would be seen as an UnAmerican.
I am so optomistic that I purchased shares on friday and am considering adding to my position again.

TTFN
TiggerFreak

 

[Bob O]

Why would a takeover attempt be UnAmerican???? Companies are taken over and bought and sold often, i dont see how it would be unamerican at all for a company to attempt to buy disney because they feel its a good value due to its diminshed stock market value at this time.

 

[TiggerFreak]

For the near term I feel that many would perceive a hostile takeover attempt as "kicking someone when they are down." This is not an attitude that many would call American, given our penchant for supporting underdogs and our sense of fairplay. As of late, I am growing weary of the MegaConglomerateOneStopMentality that is permeating corperate America these days. We are diluting the identities of many American coporate icons. This nation has always nutured individuality, even in it's companies. Maybe I'm just naive or a ruminating old fool.

TTFN
TiggerFreak

 

[Another Voice]

One quick note – who said any takeover has to be hostile?

 

[YoHo]

Its always possible that Roy, Diane and Ron are the ones looking for the takeover.

 

[renknt]

Originally posted by thedscoop

So, no matter how golden it might look, I can't imagine anyone yelling "Pull!" quite yet...

Scoop,
You are right but no one has said pull yet but I think the market has said " STAND UP,..... HOOK UP ......" and all it would take is one analyst to get us to "STAND IN THE DOOR"

 

[YoHo]

I wasn't suggesting he take over. After all, Walt Made him take the job, he didn't want it.
No, I was merely suggesting that he and the rest of the family might organize a coup.

 

[DVC-Landbaron]

Man oh man! AV says it all in an eight word question!!

Who said any takeover has to be hostile?

Or external? The last takeover (Yes, I said takeover) was!


Or as YoHo said:

Its always possible that Roy, Diane and Ron are the ones looking for the takeover.

Exactly what happened last time!!!

 

[Another Voice]

The difference between a merger and a takeover depends on if you get a paycheck or a pink slip after the deal is done.

The problem with Disney at the moment is that its management does not have the confidence of Wall Street. Eisner’s star had dimmed out of the heavens before the current situation and the today’s stock price is highly reflective of the street’s estimates of Eisner’s ability in the crisis – about as low as you can get for a Dow component. Disney is highly exposed on its theme parks, networks and consumer products groups. Its film unit could do very well, but its recent track record is horrible. The core of the company is still good in the long run and the place is loaded with assets, it’s a question of how things are being run now.

It does not take a B-school degree to realize that bringing in a management team from a company that does have the trust of Wall Street might just settle things down. This leaves The Family out of the picture despite the genetic ties (and which I did not suggest would lead the takeover in my post), but that’s just business. One could argue that finding a smaller but well respected media company (did someone out in the audience say Comcast?), arranging a “merger” which leaves that management team in real control of the company might be enough to fend off any sharks that are circling in the water.

As for The Man Who Would Be Walt? – he’ll come to understand that landing on Broadway with a golden parachute is better than reporting to Rupert Murdoch.

 

[Captain Crook]

The problem with Disney at the moment is that it's management does not have the confidence of Wall Street.

No offense AV, but haven't you been associated with the group that basically has said "Wall Street be damned" around here? If I'm mistakinly lumping you, I'm sorry...

Disney management HAS fallen out of favor with the flavor of the week Wall Street bunch and there are a few brokers, trying to make a name for themeselves, squealing about the fall of Michael Eisner...But Wall Street has a memory about 5 minutes long and certainly no longer than the last quarter. So although Disney will falter next quarter, many reports I've read have given Disney credit for the "belt tightening" that was done prior to this fiasco and believe that this is one reason Disney has an opportunity to rise from the ashes that others could only dream of.

Lest we forget, Eisner has navigaed similar waters before. Given a resumption of normalcy in the near future, Disney will bounce back, the Parks will fill, BK will be announced and a new era will begin. But most of us are not looking at the worst case scenerio...That this war does affect us dramatically at home, that germ warfare too, becomes more than science fiction...In these apalling, yet suddenly real scenerios, Theme Parks will be empty and businesses in theses sectors will be teetering on extinction. Buy out? Hostile take over? Not under these circumstances. As AV points out, Disney still has many fronts from which to fight, TV, movies, video, plus name brand recognition, but 'huge profit talk' would become laughable - survival the only goal...

This battle will be Eisner's fight. He's not going to be replaced in the midst of the turmoil, that would border on malpractice or breach of fiduciary responsibility by the Board. Takeover worries are something to watch but not immenent, IMO. Few companies will be betting the farm and willing to face regulatory scrutiny and competetor disclaimer during this type of economic environment. No my friends, Eisner is the man that will make or break Disney. You may trust him like me or loathe him like Landbaron but we'd all better root for him because if he fails, all that will be left will be the fragmentation of a once great conglomerate with its once valuable content being dvided up by whoever remains...

 

[YoHo]

I never suggested that the Disney's would be in charge, Only that they may wish to work towards a new CEO.

I have to agree with The Captain on this one though. Wall Street has the attention Span of a gnat on speed. Disney has maybe a quarter at best before the sharks try to move in.

 

[Another Voice]

My primary objections have always been against pandering to Wall Street or using them as an excuse for not making crucial decisions. Or worse, claiming that the Wall Street “demands” ever increasing profits (i.e. more budget cuts) when the real motivation is to fatten executive bonuses. Whenever you hear a businessperson justify their actions because of “The Street”, most of the time they are covering up the truth.

And yes, I generally distrust large groups of men in suits (the larger the crowd, the lower the average I.Q. has been my experience), but they must occasionally be listened to. At this point in time, Disney will be unable to raise the capital it will take to make any big deals on its own, and the Street now has every incentive to give money to someone claiming that they can do a better job than current Disney management. The company is once again in a position where the bits are more valuable than the whole and that is ALWAYS a sign that trouble is here.

I do not think there will be an ‘80’s style Oliver Stone movie take-over of Disney, the one where corporate raiders come swooping down from their pirate ships. No one has the stomach for that kind of foolishness these days. But it won’t take long for the Board to realize that it’s better to go out on your own terms than on someone else’s. My guess (and it’s only a guess) is that a nice marriage will be arranged with a “friendly” company. The Disney name will survive, but the merger will be used to clean-up all the junk of the last several decades – The Disney Stores, the sports teams, idiot cable deals, and the like.

As for Eisner’s great plans? An announcement of ‘Beastly Kingdom’ will have the same impact as a book signing by Hillary Clinton – the faithful will fawn themselves into a stupor but the real world simply won’t care. Tossing crumbs to the fandom won’t solve the problems with the Company. The company was weak before the onset of the crisis, and now cracks have become gapping canyons. It’s time to bring in someone who can fix the company. I’d rather see the important parts of Disney survive rather than to have the whole enterprise sink intact for the sake of its captain.

 

[Captain Crook]

...my guess (and it's only a guess) is that a nice mariage wil be arragned with a "friendly" company...

Well, I have thought that an agreement" with Microsoft might work on many levels, but not insofar as you're suggesting. I do not see Eisner in the life raft as the SS Disney sinks below the surface. An agreement to free up the "tangles" and allow Disney business to move on, sure. An AOL/TWX type merger with Disney as TWX...No way.

As for Eisner's great plans, an announcement of BK will have the same impact as a book signing by Hilary Clinton - the faithful will fawn themselves into a stupor and the real world simply won't care.

Well, we're really mixing the real world & fantasy world now and being one of the stupified fawners I'll be real happy when and if that day comes because it will signal a significant move forward in the face of this adversity. I still like WDW & BK would ive me a few more years...Besides, no announcement, no moves, no Eisner press conferences...Hello Rupert.

The company was weak before the onset of the crises...

I disagree it was not weak. Maybe troubled, disjointed, mired in its scope or out of focus...But not weak. The financial statement is still strong (just not as strong as it was - but who's is). Heavens, even during the bad times they weren't losing money, only making a minimally less percentage than the years before...Wall St. hype. The downgrade of their credit is a bad sign and not warranted IMO, but Disney has many options or avenues open to them (some drastic to be sure). But these options will be studied and I reiterate, Eisner will continue to lead them until such time as the real break-up is near (if Eisner bails or relinquishes power in an AOL/TWX typr merger...Turn out the lights, the parties over...No more Disney as we know it).
Regarding Scoop's post:
Amen.

 

[larworth]

I don’t see a forced transition. Even if the Board is somewhat disenchanted I think they will accept another mea culpa (I’ve seen the error of my ways) and give him time to enact a turnaround. These aren’t the conditions under which a board decides to make a major change, unless this was already very close to happening already, and even then it would likely cause a delay not an acceleration.

On someone swooping in just think of the valuation complexities. They are difficult enough in stable times. Think about trying to do it today in this market. What is a fair premium over current market value for Disney, especially when the alternative will most likely be getting someone’s else highly speculative stock in return.