Still betting that Disney would do an equity carve-out with the parks before an outright sale. As I understand, it would allow the creation of a daughter company and open the door for an infusion of cash into the subsidiary without giving up controlling interest.
I believe Walt Disney Parks & Resorts is it's own corporation that is wholly owned by The Walt Disney Company, so privately or publicly selling an interest should not be too difficult. I too would expect such a route as it would more easily allow Disney to retain control and some ownership but separation. I think an IPO is most likely if it does happen.
I haven't looked at the investment analysis on Disney, so I don't know whether Disney is in this situation. But the IPO route or selling a non-controlling interest a subsidiary is most often done by public companies if they believe that a particular business is not compatible to investors with its other operations, and therefore isn't being given a high enough value in the market, but they still want to retain control of that other business.
If we say, for example, that Disney is viewed primarily as a media company, one could make the argument that those who are interested in investing in media companies might not be too enthused about parks and resorts, and therefore, while they assign a high multiple to media operations (because that's what they think is a good investment), they would assign a lower multiple to parks and resorts.
On the other hand, parks and resorts investors don't see Disney as a good investment because so much is tied up in media. By offering stock of the parks and resorts subsidiary (which, if it doesn't already exist, could be created without much difficulty), Disney would 1) give parks and resorts investors something to invest in, and 2) provide a measurement for the media investors of just how much the parks and resorts business that they also have a stake in is worth, potentially increasing the value of TWDC as a whole.
Done that way, the sale of a noncontrolling interest in parks and resorts would simply represent a different way to finance the P&R business. Lots of companies did this with their internet stuff back 10-12 year ago -- remember go.com?
If you want to be a conspiracy theorist -- we don't really see much of that around here, do we? :lookaroun -- you could say that making Tom Staggs, a Wall Street finance guy from way back, head of P&R, is the perfect way to sell such a deal to money managers.
