Comcast abandons bid to buy Disney
On this day in 2004 Comcast Americas largest cable operator abandons its 54 billion hostile takeover bid for the Walt Disney Company in the face of faltering stock prices and Disneys continued refusal to entertain the proposal.If accepted Comcasts February bid would have made it the largest media company in the world.Based in Philadelphia Comcast had begun as a regional cable company in Tupelo Mississippi and increased its holdings through a series of lucrative acquisitions.For its 54 billion in stock Comcast would have received control of Disneys film studio the ABC television broadcasting network and the cable channel ESPN among other assets.
Observers of the proposed merger predicted problems similar to those that had faced other media giants such as AOL-Time Warner including scrutiny from the Federal Communications Commission (FCC) which had objected to ownership of local networks and cable stations in the same market.The Disney board evaluated Comcasts offer and rejected it stating that the Comcast bid was worth 3.60 per share less than the current market price of Disney stock.Still Disneys troublesand those of its chief executive Michael Eisnerdid not begin or end with the potential Comcast takeover.Credited with reviving Disneys sprawling empire since he assumed the reins in 1984 Eisner had reportedly provoked the wrath of other studio executives and shareholders over the previous several years with his management style and decisions according to The New York Times.With Disney losing its edge in animation Eisner drew particularly sharp criticism for his ongoing failure to renew a distribution deal with the pioneering animation company Pixar Inc.
owned by Steve Jobs founder of Apple Computer.Disneys deteriorating relationship with Pixar among other issues sparked a shareholders revolt led by Roy Disney the nephew of the companys founder and the former head of its animation department.In March 2004 a few weeks after Comcast made its takeover bid Eisner lost his post as chairman of the Disney board of directors by way of a no-confidence vote.
Though Disneys fortunes began to turn around over the next year Eisner would step down as chairman in September 2005 Disneys president Robert Iger succeeded him.
