Butch

http://www.nytimes.com/2004/02/11/bu...OMCAST.html?hp

Largest U.S. Cable Operator Makes Bid for Walt Disney
By ANDREW ROSS SORKIN

Published: February 11, 2004


he Comcast Corporation, the largest cable television operator in the United States, made a $54.1 billion unsolicited takeover bid today for the Walt Disney Company, the storied family entertainment colossus.

If successful, Comcast's bid would once again reshape the entertainment landscape, creating a new media behemoth that would combine the power of Comcast's powerful distribution channels to some 21 million subscribers in the nation with Disney's vast library of content and production assets. Those include its ABC television network, ESPN and other cable networks, and the Disney and Miramax movie studios.

The deal would also create a new rival to Time Warner and Rupert Murdoch's News Corporation, which own both content and distribution channels.

However, it remains unclear whether Comcast's offer will succeed. It values Disney's shares at only a 9 percent premium over their closing price of $24.08 on Tuesday. Some analysts suggest Comcast will have to raise its offer significantly for such a trophy company if it is going to win over Disney's board and investors.

The deal could also face regulatory hurdles.

In early trading, Comcast dropped $3.39, or 10 percent, to $30.54 on the Nasdaq. Disney jumped $3.21, or 13 percent, to $27.29 on the New York Stock Exchange.

The surprise unsolicited offer comes amid turmoil within Disney's board and unrest among some investors who have called for the resignation of the company's longtime chief executive, Michael D. Eisner. Roy Disney, a former Disney director and a nephew of Walt Disney, the company's co-founder, has been leading a lobbying effort to have Mr. Eisner ousted.

Disney executives could not be reached for comment this morning.

Comcast's chief executive, Brian Roberts, sent a letter to Disney's board today outlining his proposal after Mr. Eisner apparently rejected his overtures to enter merger negotiations last week. Calling Mr. Eisner's refusal to enter talks "unfortunate," Mr. Roberts said, "Given this, the only way for us to proceed is to make a public proposal directly to you and your board."

Mr. Roberts's hostile approach to Disney closely mirrors his successful effort to acquire AT&T's cable operations in 2001. At that time, he similarly made an unsolicited offer to AT&T after being refused a chance to negotiate. AT&T was under intense pressure from investors to increase its lagging stock price and Mr. Roberts's offer pushed AT&T's board to put the cable operations up for sale, which Comcast eventually won.

In Mr. Roberts's letter to Mr. Eisner and Disney's board, he wrote, "We have a wonderful opportunity to create a company that combines distribution and content in a way that is far stronger and more valuable than either Disney or Comcast can be standing alone."

Mr. Eisner may be in a vulnerable position. After appearing to have temporarily consolidated his power in beating back the board revolt led by Roy Disney, Mr. Eisner stumbled again earlier this month when Pixar ended the companies' partnership after 13 years and hits like "Finding Nemo" and "Toy Story."

Pixar's chief executive, Steven. P. Jobs, is said to have abandoned a new deal with Disney, in part, because he could not get along Mr. Eisner.

Shares of Comcast rose 62 cents to $32.94 on Tuesday. Under the terms of the proposal, Comcast would issue 0.78 of a share of Comcast Class A common stock for each Disney share. Comcast also would assume $11.9 billion of Disney's debt.

__________________
I used to be into sadism, necrophilia and beastiality, but then I realized I was just beating a dead horse