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The Media The Almighty Buck Entertainment

Disney Board Turns Down Comcast Takeover Bid 214

Posted by timothy from the but-no-thanks dept.
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?"
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Disney Board Turns Down Comcast Takeover Bid More

Disney Board Turns Down Comcast Takeover Bid

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  • More money and less Eisner (Score:5, Insightful)

    by erick99 ( 743982 ) * <homerun@gmail.com> on Tuesday February 17, 2004 @01:28AM (#8302018)
    Disney clearly wants a better financial package. That is what they mean by " '...carefully consider any legitimate proposal..."

    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

    • Re:More money and less Eisner (Score:5, Informative)

      by wilgamesh ( 308197 ) on Tuesday February 17, 2004 @01:53AM (#8302157) Homepage
      Righto.

      According to economist article [economist.com] the Comcast offer was viewed as clearly low-ball. They would need to raise it by $8 per share to be on par with Disney perceived share value. What Disney may be doing is engaging in shrewd negotiations- the proper thing to do! I quote the salient paragraph from Economist article:

      "Mr Eisner, one of the entertainment world's great survivors, will no doubt try to fight to the death. He may offer yet more corporate governance reforms--though the easy ones are mostly done. He will point out that Comcast's opening offer, originally worth $27 a share and falling, is too low--though Comcast has surely known all along that it will have to raise its offer closer to the $35 that Lawrence Haverty of State Street Research says would tempt institutional investors. The fact is, if Disney's board really wants to keep one of the world's iconic companies independent, its best strategy may be to replace Mr Eisner forthwith. Otherwise, Comcast will soon be doing it instead."

      • Re:More money and less Eisner (Score:5, Insightful)

        by afidel ( 530433 ) on Tuesday February 17, 2004 @03:01AM (#8302422)
        What I don't understand is why all the talk about percieved value and expected selling prices for institutional investors. If Disney is worth more than its current street price to these institutional investors then why hasn't the stock actually reached that valuation? Is Disney worth more in the hands of some other company than as an independant entity? I mean if the information in the system is that Disney is worth $35 then that should be the price of the stock, if the investors are saying they won't sell unless they make a certain profit and they do not expect other bidders then the people invested in their funds should throw them out because any profit is better than no profit.

        • Re:More money and less Eisner (Score:5, Interesting)

          by gmhowell ( 26755 ) <gmhowell@gmail.com> on Tuesday February 17, 2004 @03:15AM (#8302466) Homepage Journal
          Do I think you're insightful merely because I agree with you, and was preparing a similar comment? Maybe.

          The 'Economist' has forgotten some bits of economic theory in favor of financial instruments. Plain and simple. A price expresses value only at the time of a transaction. There are millions of transactions of Disney stock on a daily basis that show, as of today, that the Economist article, no matter what formulae they use, is wrong.

        • Re:More money and less Eisner (Score:5, Insightful)

          by ffsnjb ( 238634 ) on Tuesday February 17, 2004 @03:31AM (#8302525) Homepage
          That would be the problem with the stock market. Stock price rarely ever indicates true market value of a company. Stock price is determined by one thing and one thing only: emotion of traders. If stock price was actually an indicator of value, it'd wouldn't change on the whims of investors and how they feel on a given day.

        • Re:More money and less Eisner (Score:5, Insightful)

          by bm_luethke ( 253362 ) <luethkeb.comcast@net> on Tuesday February 17, 2004 @04:48AM (#8302775)
          Mostly because a stock few want isn't worth much but a stock that people want is worth a lot. In this case few want it, but one in individual REALLY wants it driving thier cost up. Since stock price is not "real" any way (not based on physical qualities such as scarcity or manufacturing dificulty) then the price seems very fluid.

          I'll use an example I find I am currently bit with. I own two guns that I might sell (well, I only want to sell the first as the second has sentimental and neatness value making the selling price such that no one is going to pay it).

          One, a muzzleloader (black poweder rifle) sells new for about 550 as I have it equipped. I'm asking 350 for it (and they sell new at 550 regularly) but can't sell it to save my life. It is worth, as far as the parts, fit, machining quality, and such way more than 350 but I can't get that for it. I have been unsuccessful making trades for it for an item the depreciates where a firearm increases in value. I really do not understand why as I would take some of the prices and trades I've offered.

          The second gun, a WWII vintage rifle is barely worth 200 based on quality of shooting and machining. Yet because of collectors wanting said gun I could easily get 1000 for it (been offered that much directly), and it goes up signifigantly every year. I would not pay anything near that for the stylr of gun (though since it has value other than simply what it is I will not sell it except for great sums of money).

          Stocks seem to be the same thing. Disney, as disney with Eisner in charge, is worth a certain price. Comcast trying to take it over is worth much more.

          I, personally, would sell Disney in a heart beat at a fair merket value as there is probably little "other" (say, sentimental) value in stock, but then again I'm not rich off the stock market and don't know its ins and outs.

          • Re:More money and less Eisner (Score:5, Interesting)

            by EvilTwinSkippy ( 112490 ) <yoda AT etoyoc DOT com> on Tuesday February 17, 2004 @05:17AM (#8302869) Homepage Journal
            I work in a museum. We are in the process of amassing a pile of trinkets, junk mail, and discarded furnature. It just so happens that all of it was owned by some guy who lived 200 years ago by the name of Ben Franklin. It doesn't matter what it actually is, from a bedpan to an old sofa, so long as Franklin owned, used it, or built it himself it's priceless.

            It's like in Antique road show where they say "well, normally this piece would be $40, but since it has that story to go with it..."

    • When the phrase "we have confidence" or its variations are used in a public statement, I usually discount the rest of the statement as corporate BS. Of course they're going to say they are confident. But are they?

      How about coming up with something a little less cut and dry and more off the cuff convincing like "we are unwavering in our committment to seeing this through. We have studied all of our options and we are throwing 100% of our weight behind this decision". Anyway, just a pet peeve. :)
    • Judging by, among others, these articles in Slate (here [msn.com] and here [msn.com]); these articles regarding an Eisner biography (here [businessweek.com] and here [salon.com]); this little gossipy titbit [laweekly.com]; and this critical letter of resignation [sec.gov] from Roy E. Disney, the dissatisfaction with Eisner seems to have been brewing for quite some time.

  • With Pixar being lead by "You know who" .... (Score:4, Funny)

    by Anonymous Coward on Tuesday February 17, 2004 @01:30AM (#8302032)
    With Pixar being lead by "You know who" , will MS buy Disney .... (we'll see Mickey mouse using windows soon....)

  • Not surprising (Score:5, Interesting)

    by LostCluster ( 625375 ) * on Tuesday February 17, 2004 @01:31AM (#8302038)
    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!

    • Re:this shareholder MIGHT vote for good CCast bid (Score:5, Interesting)

      by Helen O'Boyle ( 324127 ) on Tuesday February 17, 2004 @02:48AM (#8302376) Journal
      Quick hint: For more info on the situation at Disney from two former longtime board members, see http://www.savedisney.com [savedisney.com]

      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 think this is good. (Score:5, Funny)

    by Anonymous Coward on Tuesday February 17, 2004 @01:31AM (#8302039)
    I'm not sure I'd have any desire to go to Comcast World.
    • Really? I'd much rather see Mike the Cable Techinician than Mickey Mouse!

      • You may want to... (Score:5, Funny)

        by shigelojoe ( 590080 ) on Tuesday February 17, 2004 @02:03AM (#8302208)
        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.

  • Comcast is a lot bigger than I thought (Score:5, Interesting)

    by Snake_Plisken ( 666881 ) * on Tuesday February 17, 2004 @01:31AM (#8302040)
    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.

  • Resistance is futile (Score:5, Insightful)

    by LibertineR ( 591918 ) on Tuesday February 17, 2004 @01:32AM (#8302043)
    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.

  • Please Consider (Score:4, Insightful)

    by miknight ( 642270 ) on Tuesday February 17, 2004 @01:33AM (#8302054) Journal
    "Does this mean that they did not believe Comcast's offer to be legitimate?"

    I thought they did consider it... just because they rejected it doesn't mean they didn't consider it, right? :P

  • Means one of two things... (Score:5, Interesting)

    by i)ave ( 716746 ) on Tuesday February 17, 2004 @01:34AM (#8302058)
    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.
    • Gates owns 7 percent of Comcast. They've got the money if they need it.

    • Just because Gates has an interest in Comcast... (Score:5, Insightful)

      by i)ave ( 716746 ) on Tuesday February 17, 2004 @01:41AM (#8302097)
      ... 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.
    • A) They like the amount Comcast offered, but don't think Comcast has the realistic ability to scrape together that kind of bread

      Comcast offered a stock-swap... and as soon as they announced that their stock price dropped. Worse yet, Disney's price rose. Oops. As a result, the cash value of the deal fell, and Comcast's offer seemed even less attractive than it was when the day started. Needless to say, Wall Street disapproved of this deal and didn't want it to happen.

      • Re:Means one of two things... (Score:5, Informative)

        by rcs1000 ( 462363 ) <rcs1000&gmail,com> on Tuesday February 17, 2004 @05:53AM (#8302989)
        Damnit!

        The Comcast share price falling and the Disney price rising is JUST ARBITRAGE. It means nothing about what people expect the combined business to do.

        If I want to buy company X, I must pay more than the current price (a premium). So, I must offer more of my own stock than I recieve in return:

        Slashdot Inc. shares trade at $22; Google Inc. trades at $18. (I'm assuming both companies have identical number of shares for similicities sake...)

        As Slashdot, I want to buy Google. So I offer one Slashdot share for every Google share. Google share holders go "hmmm... I get a share worth $22, instead of my one worth $18, good deal".

        *BUT* and here's the kicker. There are thousands of arbitrageurs who sense a perfect profit - they SHORT Slashdot (driving the share price down), and BUY GOOGLE (driving it up). So, Slashdot goes down, Google up... it's... just... arbitrage...

        Thanks,

        Robert
  • 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...

  • Next stop: Proxy fight (Score:5, Insightful)

    by LostCluster ( 625375 ) * on Tuesday February 17, 2004 @01:34AM (#8302061)
    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...
    • That's not necessarily true. My company went through this same dance a year and a half ago. The individual shareholders mean squat. It's the institutional investors that count and unfortunately all they care about is money. Disney's unique culture and history don't even factor into the equation. Just like the Comcast bid, when my company recieved the public offer for a stock swap for the company after private negotiations fell through, the board of directors denied it outright because they felt it 'und

  • Boring (Score:5, Insightful)

    by bartash ( 93498 ) on Tuesday February 17, 2004 @01:35AM (#8302062)
    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.

  • legitimate (Score:4, Insightful)

    by MillionthMonkey ( 240664 ) on Tuesday February 17, 2004 @01:35AM (#8302065)
    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.
    • And of course, at the succusful conslusion of any mating ritual - you know that someone's going to get screwed in this case, it's most likely to be the customers

  • "carefully consider any legitimate proposal" (Score:5, Informative)

    by Anonymous Coward on Tuesday February 17, 2004 @01:35AM (#8302069)
    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.
    • I think that's at least a significant part of the motivation for the statement. Disney looks bad currently what with the whole Pixar thing and Eisner basically forcing a legitimate Disney surname out of the picture. If some wealthy shareholder gets pissed and decides to start a lawsuit, Disney is going to have to demonstrate that it carefully considered legitimate offers to enhance stockholder value rather than just acted like a reactionary bitch.

      IANAL, but if my corporate law class was reasonably accurat

  • As expected... (Score:3, Insightful)

    by Bull999999 ( 652264 ) on Tuesday February 17, 2004 @01:36AM (#8302071) Journal
    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.

  • Sing along kids (Score:5, Funny)

    by ohzero ( 525786 ) <onemillioninchange AT yahoo DOT com> on Tuesday February 17, 2004 @01:36AM (#8302073) Homepage Journal
    M I C
    K E Y
    C A B L E
    No mandatory goofy screensavers. Thank you god.

  • For background information (Score:3, Interesting)

    by ObviousGuy ( 578567 ) <ObviousGuy@hotmail.com> on Tuesday February 17, 2004 @01:36AM (#8302074) Homepage Journal
    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.
    • 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.

      Umm, that's the goal of any business enterprise.

    • Re:For background information (Score:5, Insightful)

      by One Louder ( 595430 ) on Tuesday February 17, 2004 @02:30AM (#8302311)
      "Wall Street" was about the takeover market of the 1980's, and doesn't reflect the takeover environment of the 2000's.

      Back then it was common to leverage junk bonds to gain control over companies in order to break them up as you described - nowadays, they're typically misguided attempts at exploiting alledged business synergies, which never seem to actually materialize, AOL-Time Warner being the best recent example.

      While it's true that Comcast's motives are certainly not altruistic (why would they be?), it's very unlikely they want to buy Disney in order to break it up and sell the pieces.

      Blue horseshoe does not like The Walt Disney Company.

    • LOL! Knew I was gonna see this on Slashdot someday.

      Goes right up there with, "IANAL, but basedon what I read on Slashdot...

      Way to go! Wonder whats coming next?

      I've never had sex, but based on what I hear on Slashdot? :) Geeks!

      *shakes head* *mumbles* *walks away*
    • I don't think watching one hollywood movie from the 80s (starring that paragon of understated acting Michael Douglas, no less) can ever give you a clear (or even accurate) idea of how complex things like corporate mergers actually work. Hollywood isn't exactly known for letting facts and logic get in the way of a good story, rightfully so.

      Thats how you end up with flash animations running on a Mac infecting alien motherships with a computer virus.

      What you saw in that movie was a leveraged buyout: a small
    • It's really difficult for me to tell whether you're joking or not. The first sentence is obviously hilarious, but then you go on to seemingly try to make a real point based on a movie written and directed by a man who knows f***-all about big business (and is more than a little nuts - love his movies, but he went around the bend a long time ago).

      Comcast doesn't want to cannibalize Disney - I'm sure there are areas that could be trimmed (true of any conglomerate), but you don't "go after" a reasonably hea

  • Yay! (Score:5, Funny)

    by n0nsensical ( 633430 ) on Tuesday February 17, 2004 @01:37AM (#8302078)
    "So your offer's been rejected, congratulations, Comcast! What are you going to do now?" "I'm going to Hostiletakeoverland!"
  • Disney use to, and maybe still do if you pay for it, give out Disney Character Stock Certificates. Grandparents would by them for their grandkids, to start them saving, and made great artwork.

    With a Comcast take over, they need to special out that they are going to reform under the name of Disney. Giving new hope to the to the old art work.

    Besides who would go to Comcast World?

  • Disney is about culture--comcast isn't (Score:5, Insightful)

    by Riomaggio ( 313955 ) on Tuesday February 17, 2004 @01:38AM (#8302087)
    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).

    • Re:Disney is about culture--comcast isn't (Score:5, Interesting)

      by techno-vampire ( 666512 ) on Tuesday February 17, 2004 @01:51AM (#8302148) Homepage
      When Mike Jitlov [imdb.com] worked for Disney doing special effects, he found their culture so regimented and stiff that he started calling it "Mauswitz." This started to catch on, but the PHB's made it a firing offense. He then changed it to "Duckau," which was, oddly enough, acceptable.

      • He then changed it to "Duckau," which was, oddly enough, acceptable.

        I doubt that it was really "acceptable", but though management got away with quashing Mauswitz, when the second name came along they probably realized this was a game they were bound to lose. Continuing to ban an unending supply of new derogatory words would just make them look stupid and even more fascist. A smart person would have realized this with the emergence of the first word, of course.

    • Re:Disney is about culture--comcast isn't (Score:5, Insightful)

      by LostCluster ( 625375 ) * on Tuesday February 17, 2004 @02:09AM (#8302230)
      Wait a second. The Walt Disney brand has a ton of goodwill associated with it, but I'm not quite sure that the company that trades under the DIS ticker symbol can say the same. Afterall, it's responsible for Miramax and Touchstone pictures. The Disney brand can't put out an R-rated movie, but the Disney company certainly has ways to do so. The Disney culture certainly doesn't run through the ABC TV division of the company. ABC is all over the map when it comes to what kind of content it will distribute, like a good broadcast TV network should be.

      So, when it comes down to it, what people think of when they hear the word "Disney" is only a part of the overall company at this point. Disney may have aquired so much under Eisner that it's having a hard time controling itself. I'm not sure Comcast can do much of a better job, but I'm sure they want to try...
    • In all likelihood, Comcast-Disney would do everything it could to maintain the Disney brand. Probably the most you would see change about the Disney-branded resorts and films would be an increase in advertising for Comcast services. On the other hand, Comcast could benefit greatly for its own services from controlling Disney, if it plays its cards right. Disney not only owns its own brand of television products (mainly the Disney Channel), but it also owns [ketupa.net] ABC (along with a couple dozen affiliates), ESPN

  • Re: Comments (Score:3, Funny)

    by bmiller949 ( 681252 ) * on Tuesday February 17, 2004 @01:41AM (#8302095)
    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.

  • Do senators come with the purchase price? (Score:5, Funny)

    by Sabalon ( 1684 ) on Tuesday February 17, 2004 @01:42AM (#8302102)
    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 haters should know... (Score:5, Interesting)

    by LostCluster ( 625375 ) * on Tuesday February 17, 2004 @01:42AM (#8302105)
    Microsoft invested $1 billion in Comcast back in 1997 [microsoft.com] and owns quite a bit of Comcast.

  • Disney:the 800lb gorilla that can't hold a pencil? (Score:5, Insightful)

    by newdamage ( 753043 ) on Tuesday February 17, 2004 @01:49AM (#8302132) Homepage Journal
    Where is Disney's next big movie going to come from? They've closed down their Florida studio [filmbuffonline.com].

    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.

  • It's at times like these when (Score:5, Funny)

    by bersl2 ( 689221 ) on Tuesday February 17, 2004 @01:49AM (#8302133) Journal
    we must ask ourselves:

    WWWD?

  • I see a business strategy (Score:2, Interesting)

    by Anonymous Coward
    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.

  • Um ? (Score:3, Interesting)

    by Lord Kano ( 13027 ) on Tuesday February 17, 2004 @01:55AM (#8302171) Homepage Journal
    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

    • Re:Um ? (Score:5, Informative)

      by LostCluster ( 625375 ) * on Tuesday February 17, 2004 @02:16AM (#8302261)
      No, a hostile takeover is the process of buying up enough shares so that the group attempting the takeover starts to own enough of the company to make the current board meaningless. As the takeover group crosses ownership thresholds, they start to have enough shares to name their own people to the board of directors.

      If the takeover works, then the takeover interests will own a majority of the voting shares, and therefore will be able to appoint a majority of the board. At that point, the new members of board of directors will overrule and old members left standing, and the new board approves the takeover.

      • Re:Um ? (Score:3, Interesting)

        by nudicle ( 652327 )
        Just to add something to your excellent summation, this is why the Poison Pill was created. When the hostile party aquires N share in the company the Poison Pill provision kicks in which effectively dilutes the hostile party's ownership share to levels well below controlling.

        This post of OT in that I have no idea if Disney has Poison Pill protections in place, I just think the concept is interesting.

      • No, a hostile takeover is the process of buying up enough shares so that the group attempting the takeover starts to own enough of the company to make the current board meaningless.

        Thank you Captain Obvious.

        Seriously though, the process involved with a hostile takeover means that the new owners can do pretty much whatever they want without the previous board of directors having a thing to say about it.

        So back to my original question, how can Disney's board turn down Comcast's hostile takeover bid?

        LK

        • Re:Um ? (Score:5, Informative)

          by LostCluster ( 625375 ) * on Tuesday February 17, 2004 @02:42AM (#8302354)
          Oh, there hasn't been one yet... to propose a merger to a board you haven't yet struggled to take over is a friendly takeover, the fact it was laughed at not withstanding... Or, to say it another way... Slashdot invoked a business buzzword where it didn't belong in the summary yet again...

  • This is not too surprising (Score:5, Insightful)

    by ZuperDee ( 161571 ) <zuperdee@@@yahoo...com> on Tuesday February 17, 2004 @02:00AM (#8302195) Homepage Journal
    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.

  • A tactical move... (Score:5, Interesting)

    by bergeron76 ( 176351 ) * on Tuesday February 17, 2004 @02:06AM (#8302221) Homepage
    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 [imdb.com] and a debaucherous Mac-using whore [imdb.com]. 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! [imdb.com]

    • MS-NBC-ATT-Viacom-Disney-Studios anyone?
      Viacom is CBS, Disney is ABC, and neither are going to be merging with either [MS]NBC or each other anytime soon. Corporate ire aside, the FCC would never allow one company to operate two of the broadcast networks (they probably wouldn't give Viacom/CBS/MTV permission to use the restroom at this point). Perhaps I'm missing something...

  • Comcast does Porn (Score:4, Insightful)

    by crapolene ( 602426 ) on Tuesday February 17, 2004 @02:18AM (#8302273) Homepage
    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.

    • Re:Comcast does Porn (Score:3, Insightful)

      by taweili ( 111177 )

      What are you talking about? "Pulp Fiction" was published by Buna Vista which is Disney's movie distribution arm! Disney has no moral, just a clean image to keep for the public.

  • The bid was testing the waters (Score:5, Insightful)

    by Dark Bard ( 627623 ) on Tuesday February 17, 2004 @02:24AM (#8302289)
    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.

  • good good good... (Score:4, Interesting)

    by The Lynxpro ( 657990 ) <<lynxpro> <at> <gmail.com>> on Tuesday February 17, 2004 @02:36AM (#8302338)
    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! :)

    • Re:good good good... (Score:2, Insightful)

      by gmhowell ( 26755 )
      First, if the purchase is through a stock offering, how would it put Comcast in debt?

      Second, how would Disney Animation Network and Cartoon Network merge, since they wouldn't be owned by the same company? As you've said, CN is a TimeWarner company.

      My favorite local gov't cable shenanigans is that my county finally started charging a local franchise fee. And rather than taking that money, they handed it over to Comcast!

  • not accepted != not considered (Score:4, Informative)

    by RiscIt ( 95258 ) on Tuesday February 17, 2004 @02:41AM (#8302350) Homepage Journal

    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?"

    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 [reference.com]

  • Comcast and Pixar joint will topple M.E. (Score:5, Interesting)

    by ITR81 ( 727140 ) on Tuesday February 17, 2004 @02:47AM (#8302370)
    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.

  • The borad is comprised of Eisner's Lackeys (Score:5, Informative)

    by Anonymous Coward on Tuesday February 17, 2004 @02:49AM (#8302377)
    Disney's board of directors today turned down Comcast's hostile takeover bid, reports MSNBC. The board expressed confidence in Eisner's leadership.


    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/ [savedisney.com] The other items in the letters section of Roy Disney's website http://savedisney.com [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
  • It's not thast they thought Comcast's bit wasn't legitimate, it's that it wasn't high enough.

  • History Repeating Itself? (Score:5, Informative)

    by ewhac ( 5844 ) on Tuesday February 17, 2004 @03:28AM (#8302514) Homepage Journal

    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 [amazon.com]. Sounds like Eisner could use a copy right now...

    Schwab

  • Does this mean that they did not believe? (Score:3, Insightful)

    by msimm ( 580077 ) on Tuesday February 17, 2004 @04:31AM (#8302706) Homepage
    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;-)).

  • Oh shucks... (Score:4, Funny)

    by shadowmatter ( 734276 ) on Tuesday February 17, 2004 @04:35AM (#8302722)
    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?

  • Wait a second... (Score:5, Insightful)

    by Phroggy ( 441 ) * <slashdot3@ p h roggy.com> on Tuesday February 17, 2004 @05:00AM (#8302810) Homepage
    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.
    • It's not a "hostile" takeover bid until Comcast appeals to current Disney shareholders directly and offers them cash/stock for their shares, with the ultimate goal of Comcast purchasing and owning enough shares of the company to make direct changes to the board and/or have other immediate influence.

      Keep in mind the timeline:

      1. Comcast talks to Eisner and proposes a "merger".
      2. Eisner, without consulting with the board or mentioning it to shareholders, declines.
      3. Comcast goes to the press in order to be sure t

  • And in yesterday's news... (Score:3, Informative)

    by WebGangsta ( 717475 ) on Tuesday February 17, 2004 @10:19AM (#8304186)
    The Hollywood Reporter has some interesting analysis of the whole proposal. [yahoo.com]

    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 [latimes.com]. 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.

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