Comcast Makes Unsolicited Bid for Disney
By GARY GENTILE
The Associated Press
Wednesday, February 11, 2004; 10:57 PM
ORLANDO, Fla. - Cable television giant Comcast Corp. made a surprise bid for The Walt Disney Co. that would create the world's biggest media conglomerate and likely spell an end to the 20-year career of Disney chief Michael Eisner.
Comcast, which said Eisner had rejected the idea of private talks, stunned the media world with its announcement early Wednesday. It was made just before Disney started two days of meetings with analysts at its flagship Walt Disney World theme park and hours before Disney was set to announce strong first quarter earnings.
The bid was initially valued at $54 billion, but investors bid up the price of Disney stock beyond the Comcast offer - a signal that Comcast would have to sweeten its bid to be successful.
Disney's board released a statement saying it would "carefully evaluate" Comcast's offer. But the board cautioned shareholders not to take any action in the meantime.
Comcast is moving at a time that Disney is struggling with internal strife over corporate governance concerns and Eisner's plans for succession, as well as lagging performance at key businesses such as ABC.
Disney shareholders will gather for their annual meeting March 3 in Philadelphia, where, coincidentally, Comcast is based.
Comcast, the nation's biggest cable systems operator, said it would also assume $11.9 billion in debt from Disney, which also owns ESPN, movie studios and theme parks.
The proposal came as Eisner is fending off criticism from former board members Roy E. Disney, the nephew of Disney founder Walt Disney, and Stanley E. Gold about his performance and lack of a succession plan as Disney's chief executive. That pressure increased late Wednesday, when Institutional Shareholder Services, an influential shareholder group, recommended against Eisner's re-election to the Disney board, citing "blurred" lines between the board and management.
Comcast said Eisner declined earlier this week to discuss a possible merger.
"This is a very exciting moment," Comcast CEO Brian Roberts said in a conference call with investors and analysts. Roberts said the combination "would create one of the world's premier entertainment and communications companies, and, we believe, restore the Disney brand to prominence and the company to growth."
© 2004 The Associated Press