Disney board weighs plans to oust Eisner
Disney board weighs plans to oust Eisner
Dominic Rushe, New York
WALT DISNEY’s board is stepping up plans to find a new ruler to save the Magic Kingdom and fight off a $49 billion (£26 billion) hostile bid from Comcast, the US cable giant.
George Mitchell, the former Northern Ireland peacemaker and Disney’s “presiding director”, has been advised to find a replacement for troubled chief executive Michael Eisner in the run-up to a crunch shareholder meeting on March 3.
Eisner is keen to argue that Disney is recovering strongly after a fallow period. But company advisers said that hunting for a new chief executive should become a key part of Disney’s defence against Comcast’s bid.
Disney’s strategy would be to replace Eisner with a Wall Street-friendly heavy hitter. The A-list of candidates being considered includes Mel Karmazin, Viacom’s president, Terry Semel, Yahoo’s chairman, and Peter Chernin, president and chief operating officer of News Corp, the ultimate owner of The Sunday Times.
Meanwhile Disney will try to persuade shareholders that Comcast’s all-share bid significantly undervalues it.
At this early stage advisers said that four other defence strategies were also being worked on for the board’s consideration:
A so-called Pacman defence, whereby Disney launches a counterbid for Comcast;
Disney launching a bid for a company such as Charles W Ergen’s satellite-television service, Echostar. This would give the House of Mouse a pay-television distribution arm, and go some way to answering the strategic arguments behind combining Comcast with Disney;
Finding a white-knight bidder who would seek to complete a friendly merger with Disney;
Selling off key assets to refocus the company as an entertainment-content group.
However, advisers are arguing that the strategy most likely to succeed in maintaining Disney’s independence is ousting Eisner and replacing him with someone more respected by shareholders.
Last Wednesday Comcast stunned Disney with a surprise offer to trade 0.78 of a Comcast class A share for each Disney share. Disney’s stock has since made gains, setting a 52-week high of $28.41 on Thursday before settling at $26.92 on Friday.
In contrast, Comcast shares have fallen sharply since the hostile offer was announced. Disney shareholders have argued that for Comcast’s bid to be taken seriously, it needs to be pitched above $30 a share.
Brian Roberts, Comcast’s chief executive, called Eisner on Monday offering a deal, but was rebuffed. Eisner has since said the board would consider every aspect of the proposal.
Mitchell is a former US senator who helped to broker the Northern Ireland peace process. Last Tuesday, before the Comcast bid, he said the board of directors had met in January to consider a succession plan for Eisner and planned to devote more time to the issue. Sources said that process had intensified since the bid.
Copyright The Times, UK, 2004.
Disney board weighs plans to oust Eisner
Dominic Rushe, New York
WALT DISNEY’s board is stepping up plans to find a new ruler to save the Magic Kingdom and fight off a $49 billion (£26 billion) hostile bid from Comcast, the US cable giant.
George Mitchell, the former Northern Ireland peacemaker and Disney’s “presiding director”, has been advised to find a replacement for troubled chief executive Michael Eisner in the run-up to a crunch shareholder meeting on March 3.
Eisner is keen to argue that Disney is recovering strongly after a fallow period. But company advisers said that hunting for a new chief executive should become a key part of Disney’s defence against Comcast’s bid.
Disney’s strategy would be to replace Eisner with a Wall Street-friendly heavy hitter. The A-list of candidates being considered includes Mel Karmazin, Viacom’s president, Terry Semel, Yahoo’s chairman, and Peter Chernin, president and chief operating officer of News Corp, the ultimate owner of The Sunday Times.
Meanwhile Disney will try to persuade shareholders that Comcast’s all-share bid significantly undervalues it.
At this early stage advisers said that four other defence strategies were also being worked on for the board’s consideration:
A so-called Pacman defence, whereby Disney launches a counterbid for Comcast;
Disney launching a bid for a company such as Charles W Ergen’s satellite-television service, Echostar. This would give the House of Mouse a pay-television distribution arm, and go some way to answering the strategic arguments behind combining Comcast with Disney;
Finding a white-knight bidder who would seek to complete a friendly merger with Disney;
Selling off key assets to refocus the company as an entertainment-content group.
However, advisers are arguing that the strategy most likely to succeed in maintaining Disney’s independence is ousting Eisner and replacing him with someone more respected by shareholders.
Last Wednesday Comcast stunned Disney with a surprise offer to trade 0.78 of a Comcast class A share for each Disney share. Disney’s stock has since made gains, setting a 52-week high of $28.41 on Thursday before settling at $26.92 on Friday.
In contrast, Comcast shares have fallen sharply since the hostile offer was announced. Disney shareholders have argued that for Comcast’s bid to be taken seriously, it needs to be pitched above $30 a share.
Brian Roberts, Comcast’s chief executive, called Eisner on Monday offering a deal, but was rebuffed. Eisner has since said the board would consider every aspect of the proposal.
Mitchell is a former US senator who helped to broker the Northern Ireland peace process. Last Tuesday, before the Comcast bid, he said the board of directors had met in January to consider a succession plan for Eisner and planned to devote more time to the issue. Sources said that process had intensified since the bid.
Copyright The Times, UK, 2004.
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