Cable operator Comcast Corp on Wednesday launched a surprise bid to buy Walt Disney Co for about US$50 billion in stock, a deal that would create the world's largest media company and further threatens embattled Disney chief executive Michael Eisner.
Comcast chief executive Brian Roberts said he made the unsolicited all-stock offer public after Eisner personally turned it down on Monday. Eisner was already under fire from Disney founding-family shareholders bent on ousting him.
PHOTO: EPA
The proposed deal could redraw the US media landscape, inviting comparisons with the merger of America Online and Time Warner that closed in 2001, which was initially much heralded but dismally failed to meet expectations.
The Disney board met on Wednesday and asked bank advisers to analyze the offer, which would join the No. 1 US cable operator with Hollywood's top film studio, broadcaster ABC, sports channel ESPN, worldwide theme parks and a stable of animated characters from Mickey Mouse to the Lion King.
Disney and Comcast would follow in the footsteps of Time Warner and News Corp, both merger-forged media conglomerates that also combine programming and TV distribution. But a Disney-Comcast combination would overpower its two rivals by revenue.
Investors bid up Disney shares as much as 16 percent, while Comcast shares fell as much as 9 percent, as investors bet that the Comcast offer would be raised or topped by a rival.
"The price is too low," said Mel Tukman of Tukman Capital Management, which manages 15 million shares of Disney. "[Disney executives] are managing to improve fundamentals on almost every front while this is happening."
Comcast's offer, which would exchange 0.78 of a Comcast class A share for each Disney share, originally valued Disney at US$26.47 a share, a 10 percent premium to Tuesday's close.
Disney shares touched US$27.95, their highest level since July 2001, in heavy trade of 70 million shares on Wednesday, some nine times the average turnover in the past three months.
Roberts, considered one of the media industry's savviest dealmakers, sent Eisner an open letter saying it was "unfortunate" that the Disney chairman and chief executive had rejected friendly merger talks.
"Given this, the only way for us to proceed is to make a public proposal directly to you and your board," Roberts said.
He also vowed Comcast would be a disciplined buyer. "We've walked away before," he told reporters.
Merrill Lynch analyst Jessica Reif Cohen called the proposed merger a "perfect, brilliant combination." But she cut her rating on Comcast to "neutral" from "buy," saying its shares would be under pressure.
Comcast executive vice president Stephen Burke, who spent 12 years at Disney, said Comcast could squeeze US$800 million to US$1.2 billion in additional cash flow within three years. The cable operator plans to make operations run more smoothly and to launch new channels in conjunction with Disney.
The Comcast bid comes as Roy Disney, the nephew of company founder Walt Disney and a former board member, ramps up his bid to unseat Eisner, whom he accuses of mismanaging the company over the past decade and draining Disney's creative strength.
Disney on Wednesday reported earnings rose to US$688 million, or US$0.33 a share, in its fiscal first quarter ended in December, from US$36 million, or US$0.02 a share, a year earlier. The results, while overshadowed by the Comcast offer, topped the Wall Street consensus of US$0.23 per share.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
SECURITY RISK: If there is a conflict between China and Taiwan, ‘there would likely be significant consequences to global economic and security interests,’ it said China remains the top military and cyber threat to the US and continues to make progress on capabilities to seize Taiwan, a report by US intelligence agencies said on Tuesday. The report provides an overview of the “collective insights” of top US intelligence agencies about the security threats to the US posed by foreign nations and criminal organizations. In its Annual Threat Assessment, the agencies divided threats facing the US into two broad categories, “nonstate transnational criminals and terrorists” and “major state actors,” with China, Russia, Iran and North Korea named. Of those countries, “China presents the most comprehensive and robust military threat
RSS