Comcast Drops Disney Bid

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Less than three months after launching its surprise $59.9 billion bid for The Walt Disney Corp., Comcast Corp. announced Wednesday that it would withdraw the offer.

Comcast launched the unsolicited bid Feb. 11, proposing to exchange 0.78 Comcast shares for every Disney share. But the deal quickly became unattractive for Disney shareholders -- it was valued at about $48 billion Tuesday -- as the stock of the media giant rose on speculation that other potential suitors would enter the picture. Disney officially rejected the bid as too low Feb. 17.

In a conference call with analysts Wednesday morning, Comcast CEO Brian Roberts said the decline in the MSO’s stock and the subsequent rise in Disney shares would have meant giving up substantially more Comcast shares than was prudent.

“Having discipline means knowing when it’s time to walk away,” Roberts said on the call. “That time is now.”

He added that if he made a mistake, it was believing that the unsolicited bid would bring Disney’s board of directors to the negotiating table.

“I think the only mistake is that we were assuming that the Disney board was going to talk with us,” Roberts said. “It seemed inconceivable to me that they would not want to have a dialogue with the world’s premiere distribution company. But that turned out to be the case, so to that extent, we miscalculated.”

He added that it is unlikely that Comcast would be willing to go back to the negotiating table.

“We’re moving on,” Roberts said. “Today was the time to withdraw, in our best judgment. It was very carefully analyzed before we made the proposal. We carefully analyzed it to make today’s decision.”

Roberts also refuted claims that the Disney bid signaled that Comcast had lost confidence in the cable business.

“We love the cable business,” Roberts said, adding that Comcast has restarted a $1 billion share-buyback plan.

Analysts have speculated for months that Comcast would drop the Disney bid. Disney may have accelerated the process by issuing a statement late Tuesday after a two-day board-of-directors meeting reiterating its confidence in CEO Michael Eisner. It was turmoil surrounding Eisner’s leadership of the company that spurred Comcast’s bid in the first place.

Opting out of a Disney bid could open the door for Comcast to pursue Adelphia Communications Corp., which said last week that it would explore options for a sale.

On a conference call with analysts, Roberts said pursuing Adelphia is a possibility. “I suspect we’ll look at those,” he said on the conference call. “A number of their systems fit our footprint.”

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