Roberts: Disney Bid About Opportunity, Not Turmoil

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New York -- Comcast Corp. president and CEO Brian Roberts hinted that the recent turmoil at The Walt Disney Co. may have played a small part in the Philadelphia MSO’s decision to launch an unsolicited bid for the media giant, but he added that the primary reason was the opportunities the merger presented for both companies.

"In all business, you’re looking at all of the facts at the time," Roberts said at a press conference here Wednesday afternoon. "This is a pretty compelling combination. When is best to put it together, how best to do it -- that’s all very important, but you’ve got to start with [asking if] we think this company can be something pretty special, and we certainly do."

He continued, "Earlier this week, I spoke with [Disney chairman] Michael Eisner, and he said he was not interested. Today, we were announcing earnings, this was something on our mind and we wanted to tell our investors that this is something we might be doing and something we would be pursuing. I don’t know how you ever explain timing, but it has a lot to do with being told earlier this week that it was either to not go down this road or to start the process."

In a prepared statement, Disney said its board of directors will carefully evaluate the proposal, adding, "In the meantime, there is no action shareholders should take."

Comcast has proposed offering 0.78 shares of Comcast class-A common stock for each share of Disney, valuing the stock at $26.47, about a 10% premium over its Feb. 10 close. In addition, Comcast would assume about $11.9 billion of Disney debt.

Disney shareholders would have a 42% stake in the company, while the Roberts family would control 33% of the stock.

Disney shares shot up on the news, rising 14%.6, or $3.52 per share, to $27.60 each Wednesday. Comcast stock fell nearly 8% ($2.70 per share) to $31.23 each.

Eisner has been under fire from two former board members -- Roy Disney and Stanley Gold -- who have called for his ouster, as well as that of several members of the board of directors.

Roberts said he has not spoken with Roy Disney or any other member of Disney’s board. However, in a letter to Eisner made public Wednesday, Comcast said it would welcome some current Disney board members to join the new board of the combined company. Comcast would not identify who those board members would be.

The combination of Disney and Comcast would be immensely powerful, joining Comcast’s 21.5 million cable subscribers and handful of cable networks with Disney’s ABC broadcast network, amusement parks, film studios, cable channels and broadcast-television and radio stations.

One of Disney’s cable channels -- ESPN -- could benefit from Comcast’s own regional sports networks, Roberts said

He added that the combination might also provide a way for ESPN to grow without having to rely on substantial rate hikes -- a sore point with many MSOs.

"There is an opportunity to enhance that product, and there are many ways to do that without raising rates -- high-definition, interactivity and streaming," Roberts said. "These are things that Disney is working on and Comcast is working on. The opportunity to do that as one company -- to help regional sports, to help look at additional channels -- I think it is a terrific position."

Comcast cable-division president Steve Burke -- who ran three of Disney’s four divisions 12 years ago -- said synergies could extend to video-on-demand services.

"Wouldn’t it be wonderful if you could have a subscription on-demand package of Disney programming for your kids? Would people pay $9.95 per month for that?" Burke asked.

"I know I would," he added. "I have five kids, and the idea of being able to give them more Disney product would be exciting for them. But I think the same thing could be true for ESPN or ABC. All of those products are waiting to be further used on all of these new technologies."