Spring Break
Cable giant Comcast makes surprise offer to buy Disney
By: Gary Gentile — The Associated Press
Issue date: 2/12/04 Section: News
ORLANDO, Fla. - Cable television giant Comcast Corp. made a surprise bid Wednesday to buy The Walt Disney Co. for more than $54 billion, a deal that would take advantage of Disney's growing vulnerability to create the world's biggest media conglomerate.
Disney's board released a statement saying it would ''carefully evaluate'' Comcast's unsolicited offer.
If approved, the deal would drastically alter the nation's media landscape by bringing together two companies that have enormous interests in the film, television and cable TV industries.
Comcast is the nation's largest cable company with 21 million subscribers, and has a stake in several cable networks, while Disney owns the ABC and ESPN television networks, in addition to movie studios and theme parks.
Comcast CEO Brian 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.''
A Disney-Comcast combination would eclipse Time Warner as the world's biggest media company.
The offer comes at a vulnerable time for Disney. The boardroom has been in turmoil over Disney chief Michael Eisner's leadership and the collapse of talks to extend the company's lucrative deal with Pixar Animation Studios, which created such blockbuster hits as ''Toy Story'' and ''Finding Nemo.'' Disney is also suffering from lagging performances at key businesses such as ABC.
The deal could mean the end of the 20-year career of Eisner, who 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.
Comcast said Eisner declined earlier this week to discuss a possible merger.
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 offer to be successful.
Comcast made the announcement just as Disney was to start two days of meetings with analysts at its flagship Walt Disney World theme park and hours before Disney was to announce strong first-quarter earnings.
As if to answer the bid, Disney released its first-quarter earnings hours sooner than originally planned.
The earnings easily beat analysts' expectations and showed the company was firmly on a turnaround that would see 30 percent earnings growth this year and double digit growth until at least 2007, Eisner said.
Eisner made a brief reference to the bid at the beginning of a conference call to discuss the earnings, saying the board had asked Disney's management and advisers to ''to provide an in-depth analysis of the proposal to enable the board to respond appropriately.''
Analysts said the Disney-Comcast combination made sense, but questioned whether Comcast would be able to sufficiently sweeten the pot.
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