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Comcast Proposes to Buy Walt Disney Co.

#1 User is offline   DisneyFreak1228 

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Posted 11 February 2004 - 12:31 PM

By SKIP WOLLENBERG, AP Business Writer

NEW YORK - In a stunning move, cable TV giant Comcast Corp. proposed early Wednesday to buy Walt Disney Co., the iconic entertainment powerhouse, for stock valued at about $54 billion. It said Disney chief Michael Eisner had rebuffed its request for talks.

The nation's biggest cable systems operator said it would also assume $11.9 billion in debt held by Disney, which also owns ABC and ESPN television networks.

Comcast's stunning proposal was made even as Disney boss Michael 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.

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."

Noting that the offer for Disney had already been rejected by Eisner, an analyst asked Roberts what would come next. "The ball's in Disney's court," Roberts replied.

Calls to Disney representatives Zenia Mucha, Michelle Bergman and John Spelich were not immediately returned early Wednesday. Michael Citrick, spokesman for Disney and Gold, said they had no immediate comment.

Paul Kim, senior media analyst at Tradition Asiel Securities, said that while Roberts making a bid for Disney in and of itself is not surprising, the timing is.

"It's going for the jugular," he said. "He is using this vulnerable time to force Disney's hand."

Kim also said Comcast is basically a cable company, and might be biting off more than it can chew. "I think they underestimate the complexity of being a broad-based media company," he said.

Comcast also released a letter sent to Eisner indicating that Eisner had personally rejected Roberts' offer to enter into discussions about a merger earlier in the week.

The letter from Roberts called it "unfortunate" that Eisner was not willing to enter into discussions. "Given this, the only way for us to proceed is to make a public proposal directly to you and your board," the letter stated.

On Comcast's conference call, Steve Burke, the head of the company's cable division, told investors that Comcast believed it could greatly improve the performance of several of Disney's key businesses, including ABC, the ABC Family channel, animation and theme parks.

"We think job one is restoring the company to its previous levels of profitability," said Burke, who had previously worked at Disney for 12 years.

Under the merger, Comcast said it would issue 0.78 of a share of its Class A stock for each Disney share, and Disney shareholders would retain 42 percent of the combined company.

The deal values each Disney share at $26.49, a 10 percent premium over their closing price Tuesday.

In a sign that investors expect a nasty fight, Disney's shares shot up $3.36, or 14 percent to $27.44 in heavy trading on the New York Stock Exchange, well above Comcast's current offer. Comcast's Class A shares tumbled $3.14, or 9 percent, to $30.79 on the Nasdaq Stock Market.

Philadelphia-based Comcast merged with AT&T Broadband in November 2002, making it the largest cable TV company in the country with 21 million subscribers. The company noted that merger in its sales pitch Wednesday.

"Our management team has a proven track record of successful integration of our merger partners," Roberts said.

Comcast Corp. also reported Wednesday that it swung to a profit of $383 million, or 17 cents per share, for the quarter ending Dec. 31 thanks to continued strong demand for its digital cable and high-speed Internet services. Revenues jumped 58 percent to $4.74 billion.

Comcast also has extensive holdings in content providers, with majority stakes in Comcast-Spectacor, the owner of the Philadelphia Flyers and 76ers; Comcast SportsNet, E! Entertainment Television, the Style Network, Golf Channel, Outdoor Life Network and G4.

Source: Yahoo! News
*Leslie Ivette*
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#2 User is offline   disneyprincess 

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Posted 11 February 2004 - 02:09 PM

Matt posted it here :santa: http://www.mgmstudio...topic.php?t=784
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#3 User is offline   DisneyFreak1228 

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Posted 11 February 2004 - 09:40 PM

lol Yeah, I didn't notice that at the time. I was doing my design project and trying to post and talking to Matt at the same time, and he was yelling at me about not posting as much lately. :santa:
*Leslie Ivette*
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#4 User is offline   QuickGold 

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Posted 12 February 2004 - 10:35 AM

Yea, yea, yea....blame poor Matt
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#5 User is offline   DisneyFreak1228 

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Posted 12 February 2004 - 10:43 PM

It's always your fault, Jew.
Don't you know that by now?
*Leslie Ivette*
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