Could Disney face another hostile takeover attempt?

Darkprime

Well-Known Member
A couple thoughts from this thread:

Today, February 12, one of NPR's news stories was 'China says no new Covid19 cases reported in the last day'. Hopefully meaning China is getting a handle on this.

On Disney's conference call, they mentioned Shanghai and HK parks down for two months and the company taking a 135 million hit for that. Not a huge amount in the scheme of things. Investors and analysts are usually forgiving if they know it's coming. Disney stock is almost a dollar today. My curiosity was how did they figure two months? I'm sure they have experts on the topic they consult for this info.

On takeovers, there are a handful of companies that could pull it off: Apple, Alphabet and Amazon. I highly doubt US regulators would let a foreign company takeover a US media/news organization (ABC), so no worries about Aramco or other wealthy Middle East companies doing so. And on the three A's: Apple, Alphabet and Amazon, Congress thinks they are too big already, every once in awhile you'll hear some Senator suggest they should be broken up. I don't think regulators would approve one of them making a play for Disney.

All that to say, I think Disney is in pretty good shape.
An Apple/Disney merger would never get approved in the current climate. Aren't apple and a lot of the tech companies dealing with an anti-trust probes atm?
 

Robbiem

Well-Known Member
Plain and simple, when Comcast made an offer during the hostile bid to take over Disney, the Disney board said the offer was too low. Every company including Disney is up for sale at the right price.
im sure i read somewhere Walt and Roy considered selling out to General Electric in the 60s when big corps were buying up studio. Similarly I think Eisner explored a merger with Warner Bros before AOL bought them. Everything is for sale it just depends if you can afford the price
 

Wdadw

New Member
Important thing to note for today’s company is that it has become the definition of vertical integration with only one purpose, selling of IP. Corporate raiders no longer have leverage because of the integration of IP across company bandwidth, including parks, to break apart company for profit. Only Apple, Amazon, or Microsoft could acquire to assist in their own entertainment divisions, but would come at a cost of horizontal integration leading to speculation of potential government regulation.
As far as virus this could potentially shore up sectors that have been losing money by increasing viewership of ESPN, ABC properties as sporting events consider removing audiences. While Disney is vertically integrated, they have enough platforms (to many to single out) to sell their IP that they have protected themselves from a single divisions short term impact and have delivered a balanced performance.
 

Disney Irish

Well-Known Member
Not this again..

Basically the only analyst who has been beating this drum for over a decade, its all just wishful thinking.
 

winstongator

Well-Known Member
Not this again..

I saw the idea of disney being taken over somewhere else recently, and the one company that came to mind was Apple. it’s big enough and has enough cash. However, i Don’t think regulators would let it happen. Apple sells a ton of media via their products (iPhone, iPad, AppleTV), so letting them get the media and preferentially delivering would be a negative for consumers. I also think Apple wouldn’t want disney. How many products does Apple really sell? 6? Macs, iPhone, iPad, airbuds, watch, and appleTV. Disney is such a different company, I don’t see real synergy outside of monopolistic media delivery. I also don’t see Tim Cook doing this, or Disney’s board giving up control.

having Disney+ and the huge fox library is quite useful now. Not sure if people will cancel espn, but their ads are going to be a lot less valuable Without live sports. Diversified revenue streams helps. I agree that the lower tier parks will be hurt much worse, and some were already in trouble before Coronavirus hit.

@CaptainAmerica : who sells disney their business interruption insurance? I need to make sure I don’t own any of their stock.
 

Darkprime

Well-Known Member
I saw the idea of disney being taken over somewhere else recently, and the one company that came to mind was Apple. it’s big enough and has enough cash. However, i Don’t think regulators would let it happen
This is the key here. The current DOJ hates tech companies. Some of them were even dealing with anti-trust probes up until recently. Like Google. There is no way Apple/Disney would be approved in the current climate.
 

mharrington

Well-Known Member
Original Poster
Now I've heard that Apple's stock, while impacted by the COVID-19-influenced stock market crash, is in better shape than Disney's, which is caused not only by the closures of all the parks, but also the halting of all movies in production (live-action remake of "The Little Mermaid") or about to be released ("Mulan", "The New Mutants", etc.). The worst part is, it's indefinite, as I have no idea how long this will last. My take is that this situation will last until there is a vaccine for the coronavirus, which is in development right now, but it may not available for well over a year. By then, Disney as we know very well could be taken over.
 

Disney Irish

Well-Known Member
Now I've heard that Apple's stock, while impacted by the COVID-19-influenced stock market crash, is in better shape than Disney's, which is caused not only by the closures of all the parks, but also the halting of all movies in production (live-action remake of "The Little Mermaid") or about to be released ("Mulan", "The New Mutants", etc.). The worst part is, it's indefinite, as I have no idea how long this will last. My take is that this situation will last until there is a vaccine for the coronavirus, which is in development right now, but it may not available for well over a year. By then, Disney as we know very well could be taken over.
Read what some of the others have posted.

Basically at this point there is very few companies that can afford Disney, most being tech companies. In this climate no tech company would be approved to buy Disney.

Also I have to think that while some of us have wishful thinking that Disney might use this as a buying opportunity, Fed Regs will likely limit who can buy who during this time. So again I don't see Disney being bought by anyone anytime soon. Disney can and likely will ride this wave of uncertainty and make it out the other side relatively intact. Maybe they may sell some things off, but not likely the whole company if anything.
 

networkpro

Well-Known Member
In the Parks
Yes
I would take another tact with this: Apple shouldn't want to buy Disney. They should consider AT&T and Verizon as cautionary tales for corporations purchasing industries where they lack expertise and knowledge.
 

MisterPenguin

Rumormonger
Premium Member
Apple's stock is doing better than Disney's... today.

It would be the highest level of corporate malfeasance to attempt such a unprecedented takeover (because of how big Disney is now) when their own fortunes could plummet like so many others.

How long before Apple starts announcing the delay of their next generation devices because of shortage of supplies out of Asia? When that happens, their stock will drop to everyone else's level.

And would Apple want to invest in a company whose stocks can't whether such a crisis?

"Hey, let's take over another company"
"Because it's doing so well?"
"No, because it's tanking!"
<board gets voted out of office by shareholders>​
 

Disney Irish

Well-Known Member
Apple's stock is doing better than Disney's... today.

It would be the highest level of corporate malfeasance to attempt such a unprecedented takeover (because of how big Disney is now) when their own fortunes could plummet like so many others.

How long before Apple starts announcing the delay of their next generation devices because of shortage of supplies out of Asia? When that happens, their stock will drop to everyone else's level.

And would Apple want to invest in a company whose stocks can't whether such a crisis?

"Hey, let's take over another company"
"Because it's doing so well?"
"No, because it's tanking!"
<board gets voted out of office by shareholders>​
When you say doing better, you mean just not down the same percentage today right? Because APPL is still down today, and analysts are slashing and burning their price targets for APPL amid its exposure to COVID-19 long term. There is no reason to think APPL is doing any better than DIS right now as both are consumer companies having similar exposure to COVID-19. Both will be fine from this, and agree as I said earlier in the thread, no reason to think APPL will buy DIS.
 

mharrington

Well-Known Member
Original Poster
I found this in an article from MiceChat: https://www.micechat.com/254880-disneyland-update-the-painful-afterglow/. About halfway down, there is a part of the article which states that Disney's stock is so bad right now (at $85.98) that it could leave it wide open to a takeover of some kind, if not Apple (on which MiceChat had also done an article), then something else:

...Disney has announced plans to raise up to 6 BILLION dollars in a new debt offering. They intend to use the funds raised to pay for general business expenses, including paying off other debt. That’s a bit like getting a new high-limit credit card to pay your bills and make payments on your other credit cards.

Disney explained the need for the offering in its Securities and Exchange Commission filing:

"We have closed our theme parks; suspended our cruises and theatrical shows; delayed theatrical distribution of films both domestically and internationally; and experienced supply chain disruption and ad sales impacts. In addition there has been a disruption in creation and availability of content we rely on for our various distribution paths, including most significantly the cancellation of certain sports events and the shutting down of production of most film and television content."

Will the intake of debt be enough to keep the wolves at bay? The prospects of Disney having to seek a deep pocket suitor or allow itself to be bought outgrow with its falling stock price. Disney is currently trading at about half its 52 week high.

Could this make Disney an attractive takeover target? There are several companies we can think of who might be interested in such a deeply discounted prize.


We keep hearing how Disney will survive this, but the fact remains that with all movie theater chains closed, that will not bode well for the movie industry in general (not just Disney), and there is no guarantee that it will recover. And let's not forget, customer spending habits could be changed forever by this pandemic.

One of the comments at the bottom of the article stated if not Apple, then maybe either Amazon or Google would merge with Disney.
 

MisterPenguin

Rumormonger
Premium Member
I found this in an article from MiceChat: https://www.micechat.com/254880-disneyland-update-the-painful-afterglow/. About halfway down, there is a part of the article which states that Disney's stock is so bad right now (at $85.98) that it could leave it wide open to a takeover of some kind, if not Apple (on which MiceChat had also done an article), then something else:

...Disney has announced plans to raise up to 6 BILLION dollars in a new debt offering. They intend to use the funds raised to pay for general business expenses, including paying off other debt. That’s a bit like getting a new high-limit credit card to pay your bills and make payments on your other credit cards.

Disney explained the need for the offering in its Securities and Exchange Commission filing:

"We have closed our theme parks; suspended our cruises and theatrical shows; delayed theatrical distribution of films both domestically and internationally; and experienced supply chain disruption and ad sales impacts. In addition there has been a disruption in creation and availability of content we rely on for our various distribution paths, including most significantly the cancellation of certain sports events and the shutting down of production of most film and television content."

Will the intake of debt be enough to keep the wolves at bay? The prospects of Disney having to seek a deep pocket suitor or allow itself to be bought outgrow with its falling stock price. Disney is currently trading at about half its 52 week high.

Could this make Disney an attractive takeover target? There are several companies we can think of who might be interested in such a deeply discounted prize.


We keep hearing how Disney will survive this, but the fact remains that with all movie theater chains closed, that will not bode well for the movie industry in general (not just Disney), and there is no guarantee that it will recover. And let's not forget, customer spending habits could be changed forever by this pandemic.

One of the comments at the bottom of the article stated if not Apple, then maybe either Amazon or Google would merge with Disney.
I'm unconvinced by a blogger.
 

mharrington

Well-Known Member
Original Poster
I'm unconvinced by a blogger.
The blogger (Dusty Sage) mentioned that these are tough times. One of the comments mentioned that this situation is even worse for Disney than 9/11, that the consumer will be wiped out and won't shop for a Disney vacation at any price.

Another comment stated that four years ago, Disney traded for around $90 (a little less than today), with no buyout mentioned then. It was also trading at about $50 ten years ago; no buyout there either. Dusty Sage countered by mentioning what analysts are saying, that times are different now than then:

Was anyone calling for Disney to buy FOX before they did so? It happened because Disney decided they wanted to do it. And they bought at the top of the market. These are very different times. Someone who wanted not just FOX (which Comcast also wanted), but Marvel, Pixar, Lucas, and all of Disney, could do so now for a massive discount and all packaged together in one Disney deal. I have little doubt that is being discussed in multiple board rooms even as we speak (Apple, Google, Comcast, even a corporate raider like Blackstone or Carl Icahn could do so). And every day that Disney's stock price continues to fall will make it all the more likely to happen. That's just how business works. You might not want to believe it, but we aren't being Pollyanna to the possibilities. The fact is that Disney has faced multiple takeover attempts in the past in times far less perilous than these.

Dusty Sage is basically arguing that COVID-19 could very well make Disney helpless against a takeover attempt this time.
 
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