Could Disney face another hostile takeover attempt?

[mharrington]

I've been hearing about reduced profits (though I haven't looked in the annual report) from the theme parks in particular, as well as the trend of live-action remakes of animated Disney movies. I'm sure this is liable to impact Disney stock, but are these also signs that Disney could very well face another hostile takeover attempt in the future?

My question is actually based (in part) on this video from Rob Plays, which talks about not just the hostile takeover attempt of Disney in 1984, but also a similar, if not identical, takeover attempt in 2004 by Comcast. This video presents both attempts from the perspective of the Reedy Creek Improvement District, which helps run WDW, because any takeover of Disney would mean a takeover of Reedy Creek as well:


The video ends with the notion that given all of its acquisitions as of late, it will be more difficult for Disney to be bought, but never say never, if the events of 1984 and 2004 were any indication. The way things are happening right now, is Disney (and by extension, Reedy Creek) on the verge of another takeover attempt? I believe that disaster was averted because Disney got lucky. But luck cannot last forever, especially since Roy E. Disney helped to avert disaster, but is long dead now. The distance between 1984 and 2004 is 20 years, so I think/feel something is sure to happen in another 20 years; that is, in 2024. Given where it is now, do you think/feel the same way?

 

[Disney Irish]

I've been hearing about reduced profits (though I haven't looked in the annual report) from the theme parks in particular, as well as the trend of live-action remakes of animated Disney movies. I'm sure this is liable to impact Disney stock, but are these also signs that Disney could very well face another hostile takeover attempt in the future?

My question is actually based (in part) on this video from Rob Plays, which talks about not just the hostile takeover attempt of Disney in 1984, but also a similar, if not identical, takeover attempt in 2004 by Comcast. This video presents both attempts from the perspective of the Reedy Creek Improvement District, which helps run WDW, because any takeover of Disney would mean a takeover of Reedy Creek as well:


The video ends with the notion that given all of its acquisitions as of late, it will be more difficult for Disney to be bought, but never say never, if the events of 1984 and 2004 were any indication. The way things are happening right now, is Disney (and by extension, Reedy Creek) on the verge of another takeover attempt? I believe that disaster was averted because Disney got lucky. But luck cannot last forever, especially since Roy E. Disney helped to avert disaster, but is long dead now. The distance between 1984 and 2004 is 20 years, so I think/feel something is sure to happen in another 20 years; that is, in 2024. Given where it is now, do you think/feel the same way?

So while I never say never in business, its very unlikely at this point for a hostile takeover to happen. Disney would have to lose so much value for them to even be a hostile takeover target. So no a hostile takeover won't happen, they are too large now. As there aren't many companies with a big enough war chest to afford Disney nor would want them.

A merger however with another company may be possible. But I would think Disney would be the aggressor in that situation.

Also any CEO would likely spin-off/sell some of the units, like Pixar, Marvel, LucasFilm, in order to improve value before any hostile takeover would even been in the conversation.

So again too many things are in the way now for a hostile takeover to even be a worry for Disney.

 

[Mouse Trap]

The largest hostile takeover was at 200B. Disney is valued at 240B right now... that would be a truly massive hostile takeover. I think Disney would have to spiral and lose a lot of value before anything could happen.

 

[mharrington]

Another source of my concern is the press, which is accusing Disney of losing its way (at least as far as the parks are concerned), as seen in The Federalist (https://thefederalist.com/2019/09/04/star-wars-land-proof-disney-lost-way/) and the L.A. Times (https://www.latimes.com/entertainme...-25/disney-theme-parks-marvel-star-wars-epcot).

It cannot be a coincidence that the company being accused in the press of losing its way could have an impact on its value.

 

[Disney Irish]

Another source of my concern is the press, which is accusing Disney of losing its way (at least as far as the parks are concerned), as seen in The Federalist (https://thefederalist.com/2019/09/04/star-wars-land-proof-disney-lost-way/) and the L.A. Times (https://www.latimes.com/entertainme...-25/disney-theme-parks-marvel-star-wars-epcot).

It cannot be a coincidence that the company being accused in the press of losing its way could have an impact on its value.

You're reading too much into these clickbait articles. Disney is and will be fine. Disney is no longer just a single studio with a theme park company. Its a media conglomerate with many business units working together. Some see that as an issue due in large part to nostalgia, as Disney is no longer the company from their childhood. That is where a lot of these articles come from. Sure there have been missteps, every large company has them at one time or another. But none severe enough to warrant worry about the company being the target of a hostile takeover. Again the company would have to lose a lot of value before that would be of concern, think more than 2/3s of it value.

FYI, I'm not speaking as a member of the fandom. I'm speaking as a shareholder in this case.

 

[Mouse Trap]

In 2004 Comcast tried a hostile takeover bid of Disney offering 54.1 billion and also offering to pay off all of 11 billion of debt of Disney. Disney board said no thanks and the offer was too low. Everything is for sale at the right price._

You’re comparing 54B to 240B. If Disney was only worth 54B today they’d definitely have been swallowed up. It’s not about right price anymore it’s who can afford it... and the companies that can afford it aren’t all too interested in things like parks, cruises and timeshare to name a few. Buying Disney comes with a lot of baggage.

 

[Mouse Trap]

2 years ago Apple CEO Tim Cook talked about looking into buying a media company. Apple is valued last year at 492B. Wasn't comparing 54B to 240B.

Then I’m not sure how your previous posts relate to the plausibility of Disney being purchased

 

[Darkprime]

Who would even be the buyer in this scenario? I don't see Comcast trying again after the failed attempt 2004. Plus they're in too much debt. That leaves one of the tech/streaming giants either Amazon, Apple, Google or Netflix. 3 of them are currently under investigation by anti-trust it would never get approved. And Netflix much like Comcast is in too much debt.

 

[Mouse Trap]

Who would even be the buyer in this scenario? I don't see Comcast trying again after the failed attempt 2004. Plus they're in too much debt. That leaves one of the tech/streaming giants either Amazon, Apple, Google or Netflix. 3 of them are currently under investigation by anti-trust it would never get approved. And Netflix much like Comcast is in too much debt.

No one.

 

[mharrington]

I just saw this article from the Hollywood Reporter, which clearly states that Iger is betting the entire company, and by extension, all of Hollywood, on streaming: https://www.hollywoodreporter.com/f...-company-hollywood-s-future-streaming-1247663.

Does that mean that if Disney+ were to fail (I sure hope not), would that have adverse consequences for the company, and indeed all of Hollywood? It should be noted that the Disney Channel launched right before the threats of hostile takeover attempts, so I'm concerned that something similar could happen here. There is one piece in the article where it says...

Not succeeding with Disney+ isn't really an option for Iger, 68, who has said he plans to step down from his post at the end of 2021. His legacy, and the future of Disney, depends on it.

The impression I'm getting from that statement is if Disney+ doesn't succeed, Disney may not have a future.

 

[Lilofan]

I just saw this article from the Hollywood Reporter, which clearly states that Iger is betting the entire company, and by extension, all of Hollywood, on streaming: https://www.hollywoodreporter.com/f...-company-hollywood-s-future-streaming-1247663.

Does that mean that if Disney+ were to fail (I sure hope not), would that have adverse consequences for the company, and indeed all of Hollywood? It should be noted that the Disney Channel launched right before the threats of hostile takeover attempts, so I'm concerned that something similar could happen here. There is one piece in the article where it says...

Not succeeding with Disney+ isn't really an option for Iger, 68, who has said he plans to step down from his post at the end of 2021. His legacy, and the future of Disney, depends on it.

The impression I'm getting from that statement is if Disney+ doesn't succeed, Disney may not have a future.

I also read the article. It also mentions Kevin Mayer ( supposedly future CEO in waiting.). It's a tremendous betting the whole house gamble by Iger.

 

[Disney Irish]

I just saw this article from the Hollywood Reporter, which clearly states that Iger is betting the entire company, and by extension, all of Hollywood, on streaming: https://www.hollywoodreporter.com/f...-company-hollywood-s-future-streaming-1247663.

Does that mean that if Disney+ were to fail (I sure hope not), would that have adverse consequences for the company, and indeed all of Hollywood? It should be noted that the Disney Channel launched right before the threats of hostile takeover attempts, so I'm concerned that something similar could happen here. There is one piece in the article where it says...

Not succeeding with Disney+ isn't really an option for Iger, 68, who has said he plans to step down from his post at the end of 2021. His legacy, and the future of Disney, depends on it.

The impression I'm getting from that statement is if Disney+ doesn't succeed, Disney may not have a future.

Yet again you're reading too much into articles and thinking there is smoke where there is none. Disney is not a hostile takeover target at this point. They have too many businesses in place that would prevent it. Several posters including myself already gave you plenty of reasons why its not likely they ever will be a takeover target again.

If Disney+ fails, very very very unlikely, but if it does then they will continue what it has been doing for almost 100 years. They will continue to make films and release them to theaters. In fact they will continue to do that anyways, and continue to make Billions doing it.

So stop worrying, Disney is a very different company than all those other times when it was a potential takeover target.

 

[Disstevefan1]

The largest hostile takeover was at 200B. Disney is valued at 240B right now... that would be a truly massive hostile takeover. I think Disney would have to spiral and lose a lot of value before anything could happen.

What companies were involved in the 200B takeover you speak of?

 

[Disney Irish]

What companies were involved in the 200B takeover you speak of?

I can't speak to the one they were talking about, but the largest ever is the 202.8B takeover of Mannesmann by Vodafone in 1999.

 

[Mouse Trap]

What companies were involved in the 200B takeover you speak of?

I can't speak to the one they were talking about, but the largest ever is the 202.8B takeover of Mannesmann by Vodafone in 1999.

Yup.

 

[brianstl]

No one.

Apple could do it if they could get Blackrock, Vanguard, State Street, the Murdochs and Powell Jobs on board. Those shareholders/funds either directly or through funds they control own over 25% of Disney. Getting them isn't a huge stretch since they all, excluding the Murdochs, own a combined large share of Apple. With their shares and the cash Apple has, they could pull it off if they wanted to.

Now if Apple or those shareholders/funds would ever decide to pull the trigger is another question.

 

[Mouse Trap]

Apple could do it if they could get Blackrock, Vanguard, State Street, the Murdochs and Powell Jobs on board. Those shareholders/funds either directly or through funds they control own over 25% of Disney. Getting them isn't a huge stretch since they all, excluding the Murdochs, own a combined large share of Apple. With their shares and the cash Apple has, they could pull it off if they wanted to.

Now if Apple or those shareholders/funds would ever decide to pull the trigger is another question.

That's what I meant by no one. Too many variable and seemingly impossible pieces need to fall into place to make it happen. With Disney+ on the horizon and the parks being on somewhat shaky ground it would be hard to find a buyer willing to pay somewhere around 300B for Disney because we all know nothing sells at face value.

 

[mharrington]

I have been trying to avoid this discussion for a while, but now I feel as though it's no longer possible...

The coronavirus forced the shutdown of Shanghai and then Hong Kong Disneyland, not to mention numerous movie theaters that would be playing Disney movies, and it is only a matter of time before the domestic parks take the heat, as they will. According to this article from The Motley Fool, the coronavirus will have an impact on the second fiscal quarter, starting in May: https://www.fool.com/investing/2020/01/26/will-the-deadly-coronavirus-hurt-disney.aspx. All of this, in addition to the fact that the parks are on shaky ground right now as it is. Now many plans for the parks in particular seem to be on hold.

On another forum, at least one person commented that if the coronavirus is not contained in two weeks or so, The Walt Disney Company may not survive this, that it will cripple the company beyond recovery.

Do you believe that the coronavirus will so negatively impact Disney that, again, it could be ripe for another takeover or, worse, cease to exist altogether?

 

[NYwdwfan]

You seem to be looking for the worst possible scenario. The article clearly states they are exploring potential possibilities. Then at the bottom is looking for subscribers to their newsletter.

 

[seascape]

I have been trying to avoid this discussion for a while, but now I feel as though it's no longer possible...

The coronavirus forced the shutdown of Shanghai and then Hong Kong Disneyland, not to mention numerous movie theaters that would be playing Disney movies, and it is only a matter of time before the domestic parks take the heat, as they will. According to this article from The Motley Fool, the coronavirus will have an impact on the second fiscal quarter, starting in May: https://www.fool.com/investing/2020/01/26/will-the-deadly-coronavirus-hurt-disney.aspx. All of this, in addition to the fact that the parks are on shaky ground right now as it is. Now many plans for the parks in particular seem to be on hold.

On another forum, at least one person commented that if the coronavirus is not contained in two weeks or so, The Walt Disney Company may not survive this, that it will cripple the company beyond recovery.

Do you believe that the coronavirus will so negatively impact Disney that, again, it could be ripe for another takeover or, worse, cease to exist altogether?

The impact of the Coronavirus will be short lived. Yes, it can have a significant effect on the March 31st quarter but that is only one quarter. I actually think the bigger effect will be on the movie industry.