Comcast Makes Pitch To Buy Disney

Cable television systems giant Comcast Corp. proposed early Wednesday to buy Walt Disney Co. for stock valued at about $54 billion.

The nation's biggest cable systems operator said it would also take on $11.9 billion in Disney debt, making the deal worth $66 billion.

"This is a unique opportunity for all shareholders of Comcast and Disney to create a new leader of the entertainment and communications industry," said Comcast President and Chief Executive Officer Brian L. Roberts said in a statement.

Market professionals also reacted positively to Comcast's offer, reports CBS MarketWatch, saying it underscored confidence in the U.S. economy, and could spur further mergers and acquisitions activity in the media and entertainment sector.

"It's nice to see [mergers and acquisitions] activity back in the markets. It shows companies have cash," said Brian Williamson, vice-president of equity trading at Boston Company Asset Management. "It also fuels speculation on whether or not there are other companies in the sector which are possible takeover targets."

Peter Cardillo, chief market analyst at S.W. Bach said it was "debatable" whether the Comcast bid would succeed but the bid shows "confidence is building in corporate America. The acquisition trail is heating up."

Comcast has more than 21 million cable subscribers. The Philadelphia-based company merged with AT&T Broadband last November, and 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 also released a letter sent to Disney chief executive Michael Eisner indicating that Eisner had personally rejected Roberts' offer earlier in the week.

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

Meanwhile, the Walt Disney Co. disclosed Tuesday that its board has devoted a "significant amount of time" discussing successors to Eisner and will talk about it again at an April meeting.

In two letters sent to corporate governance advocates, Disney board presiding director George Mitchell also defended executive salaries and his own service on the board.

He also took a swipe at two ex-board members who are lobbying shareholders to vote against Eisner, Mitchell and two other board members at Disney's annual shareholder meeting next month.

The letters were part of a filing Tuesday with the Securities and Exchange Commission.

Mitchell, a former U.S. senator and a partner in the Washington, D.C.- based law firm Piper Rudnick, denied charges from ex-board members Stanley Gold and Roy E. Disney that he is too busy to devote time to his Disney duties.

Mitchell said his law practice is part time and that his service on three other corporate boards is within Disney's corporate governance guidelines. He also said that he never missed a Disney board meeting during his nine years of service.

"By contrast, while I attended every meeting over this nine-year period, neither Mr. Disney nor Mr. Gold did so," Mitchell wrote.

Gold and Roy Disney resigned from the board late last year and have called for Eisner to step down. The pair say Disney's stock has underperformed for the past nine years and that the board lacks the independence to challenge Eisner.

They responded to Mitchell in a statement that said they "rarely missed a meeting" and asserted that "the real question is the contributions made by the director at those meeting. And here we think our record speaks for itself."