Comcast Proposes Merger With Disney

Comcast, the nation's largest cable television operator, has offered to buy the Walt Disney Company, in a surprise bid worth $66 billion the entertainment giant's board said it would "carefully evaluate."

Comcast President and CEO Brian Roberts said today the company was going public with the unsolicited offer after Disney Chairman and CEO Michael Eisner declined to enter discussions.

The proposed merger includes stock valued at $54 billion and assumed debt of $11.9 billion.

Disney confirmed the offer. "The Walt Disney Company Board of Directors has received and will carefully evaluate the unsolicited proposal from Comcast Corp," the company said in a statement released today.

At a Disney investor conference in Orlando, Fla., Eisner acknowledged the offer, but went no further than the board of directors did.

"We did get an unsolicited offer today, which the board of directors of the Walt Disney Company will take under advisement, carefully consider and in due course have a response," Eisner said.

"The ball is in Disney's court," Comcast's Roberts said today. "I don't feel that there's anything to be bashful about. We think it's a very fair proposal. I hope the board will consider it."

Government Scrutiny Promised

If the two giant companies were to merge, it would combine the largest cable service provider — with 21 million subscribers — with Disney's theme parks, movies, ABC television and radio networks and the ESPN cable television network. Comcast is also a major player in high-speed Internet service, serving more than 5 million subscribers.

Comcast, which has grown rapidly in the past decade, including with a merger with AT&T Broadband in late 2002, calls the offer a wonderful opportunity to combine distribution — which Comcast has plenty of — and content, in which Disney is rich.

"This is a pretty compelling combination," Roberts said.

But amid questions of how the merger might affect consumers, Federal Communications Commission chairman Michael Powell, testifying before a Senate panel on an unrelated issue today, said his agency would be watching developments with the proposal closely.

"I don't know if Comcast will get Disney or not," he said. "If it does, a merger of that magnitude will unquestionably go through the finest filter at the commission I can assure you that's possible."

Eisner Under Pressure

The proposal comes as Eisner resists pressure from former board members Roy E. Disney, the nephew of Disney founder Walt Disney, and Stanley E. Gold, who have criticized his performance and his failure to establish a succession plan as Disney's chief executive.

Among the criticisms was that Eisner allowed the collapse of talks with animation studio Pixar to continue the relationship responsible for such Disney hit movies as Finding Nemo. The collapse of those talks increased the pressure on Eisner to defend his strategy for the company.

Gold said he took Comcast's bid as "validation" of the criticism he and Roy Disney have leveled at Eisner.

"We could not have asked a greater validation than the presentation Comcast gave this morning," Gold said today in a conference call. "What I would say is their presentation is a validation of the kinds of things we've been saying."

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