Analyst expects Comcast to walk away

[cherrynegra]

Analyst expects Comcast to walk away
B. of A. says firm 'waiting for reason' to drop Disney bid

LOS ANGELES (CBS.MW) -- Shares of Comcast jumped more than 3 percent Monday as a Wall Street analyst raised his rating on the cable giant and predicted it would drop its bid for Walt Disney.




Comcast (CMCSA: news, chart, profile) (CMCSK: news, chart, profile) shares rose 97 cents, or 3.4 percent, to $29.24 after Bank of America Securities analyst Douglas Shapiro issued a research note raising his rating on Comcast from "neutral" to "buy." Disney (DIS: news, chart, profile) shares, meanwhile, fell 55 cents, or 2.1 percent, to $25.70.

Shapiro said that the spread between what Comcast is offering and what Disney is willing to settle for is too great.

"The timing is tough to guess, but we believe the company is waiting for a reason to walk away," Shapiro wrote. "Disney's pending board meeting (and possible subsequent announcement about succession); Comcast's earnings release; and Disney's earnings release could all provide the opportunity."

Shapiro also set a $41 target price for Comcast, adding that the company needs to send a message that it will not pursue another similar bid.

"We think the bid has overshadowed positive fundamentals for the group and, in absence of the bid, we think [Comcast] is particularly compelling," he said.

Comcast officials would not comment on the note. Disney didn't return phone calls.

Comcast made its bid in February, but Disney's board quickly rejected the $60 billion offer as too low. Disney's board is under fire from shareholders, who cast a considerable "no" vote on returning all directors to the board last month.

Chief among them was Disney CEO Michael Eisner, who received a 43.4 percent "no" vote. Eisner lost his post as chairman but remains the company's chief executive.

Russ Britt is the Los Angeles Bureau Chief for CBS.MarketWatch.com.

 

[Shaman]

When Comcast officially drops its bid (if they decide to), Eisner will then be booted much quicker, after all, that has been the main issue (or excuse) the board has....then again this could be a trick on Comcast's part...

 

[cherrynegra]

Originally posted by objr
When Comcast officially drops its bid (if they decide to), Eisner will then be booted much quicker, after all, that has been the main issue (or excuse) the board has....then again this could be a trick on Comcast's part...

Actually, I was thinking the same thing. I can't help but feel that if the Comcast offer had not been around, Eisner would have been handed his walking papers, or we would have seen a plan of succession soon after the shareholders meeting. Hopefully they will bow out soon, Eisner will announce stepping down, and then Pixar will announce staying with Disney. One can only hope.

 

[Shaman]

Originally posted by cherrynegra
Actually, I was thinking the same thing. I can't help but feel that if the Comcast offer had not been around, Eisner would have been handed his walking papers, or we would have seen a plan of succession soon after the shareholders meeting. Hopefully they will bow out soon, Eisner will announce stepping down, and then Pixar will announce staying with Disney. One can only hope.

In a way the whole situation has been good...becuase its allowed for some time to look for qualified people...not just the first person to appease shareholders...as would've probably been the case if Comcast wouldn't have bid...I just hope that whoever is the replacement, proves to be better than Eisner...not worse...only time will tell I guess...

 

[cherrynegra]

That's what I find so frightening about this Board. They're so oblivious to the discontent that they bought everything Mikey said hook line and sinker. Surely they must have known that Mikey would have to step down sooner or later and they'd have to find someone to replace him. Just wish we knew who is on their list to take over not only as CEO, but chairman as well. Mitchell is such a joke.

 

[Woody13]

There all ready is an up to date succession plan:

Management Succession and Review

At least once a year, the Chief Executive Officer of the Company shall meet with the non-management Directors to discuss potential successors as Chief Executive Officer. The non-management Directors shall meet in executive session following such presentations to consider such discussions. The Chief Executive Officer shall also have in place at all times a confidential written procedure for the timely and efficient transfer of his or her responsibilities in the event of his or her sudden incapacitation or departure, including recommendations for longer-term succession arrangements. The Chief Executive Officer shall review this procedure periodically with the Governance and Nominating Committee.

The Chief Executive Officer shall also review periodically with the non-management Directors the performance of other key members of the senior management of the Company, as well as potential succession arrangements for such management members. Any waiver of the requirements of the Company's Standards of Business Conduct with respect to any such member of senior management shall be reported to, and be subject to the approval of, the Board of Directors.

1 These Guidelines were approved by the Board of Directors of the Company in January 2004. On March 3, 2004, the Board announced that it had approved the separation of the positions of Chief Executive Officer and Chairman of the Board, and elected Senator George Mitchell, who at the time was Presiding Director of the Board, to the position of Chairman. The Board is currently reviewing appropriate modifications to the Corporate Governance Guidelines to conform the Guidelines to these changes.



http://disney.go.com/corporate/investors/governance/guidelines8.html