Microsoft trying to buy Disney?

[Galahad]

Neil Cavuto on Fox Business Report this morning reported that Microsoft is in talks seeking to buy Disney. Now who would be the chief "evil genius", Mike or Bill......?

 

[Galahad]

The report said they were pursuing an all cash deal.......

 

[fklhou]

Interesting concept. Microsoft is one of the few companies big enough to absorb Disney. There was a mention that Business week has a story that Disney is looking at Yahoo. A purchase of Yahoo by Disney is one way to cause some antitrust issues for any Microsoft deal. In this day and age, I go not see Microsoft doing a hostile for Disney but who knows.

 

[larworth]

Here was another recent article:
http://www.latimes.com/business/la-000103374dec31.story?coll=la
with Comcast as a potential suitor.

 

[Sarangel]

And to throw another player into the pot, I heard a rumor last week at Disneyland that AT &T was looking at a takeover bid....


Sarangel

 

[fklhou]

I wonder if there could be a hostile bid for Disney. Saul Steinberg did greenmail Disney back in the mid 1980s. These best defense that Eisner and Disney has is to get the share value up so as to make any hostile takeover attempt too expensive.

 

[mattjs]

Caught a bit of analyst chatter last night about Microsoft/Disney on a couple of the market recap shows.

 

[Testtrack321]

POWER TO THE APPLE USERS!
Microsoft may look at buying Disney, but dosn't Vivendi Universal look better?
Weakened by the phone slum and poor ticket sales, dosn't it look cheeper and more feasible? Plus, Microsoft can join up with the phone part, while Disney is just, well, um Disney...
Plus, Pixar is owned by Mr. Steve Jobs.

Stand back folks, its going to look ugly!

 

[Quentin Disney]

No! This better not happen! Microsoft is not an entertainment company. Who knows what they could do to the company.

Bill Gates, I warn you, if you ever lay your hands on the mouse, I will burn my Windows XP computer, Microsoft Mouse, Microsoft Keyboard and Office in a giant bonfire next to your insanely massive mansion!!!!

 

[DVCDAVE]

GO for it Bill Gates, !!!!!!!........... Eisner wouldn't last two hours under Gates. Maybe then, and only then can we fil some of the holes in the MK like 20,000 Legues, or COP, etc.

 

[Eeyore2U]

Originally posted by DVCDAVE
GO for it Bill Gates, !!!!!!!........... Eisner wouldn't last two hours under Gates. Maybe then, and only then can we fil some of the holes in the MK like 20,000 Legues, or COP, etc.

Or maybe then it turns into Six Flags with people with no clue running it.

 

[DVCDAVE]

It is turning in to Six Flags !!! Haven't you seen Aladden's Magic Carpet ride, or that stupid copy cat Dino ride that put in at AK ! If they aren't carnival rides, I don't know what would define one ! Yet Eisner took down the Sky Way because it would cost too much to upgrade, closes COP, Time Keeper, 20,00 Leagues, and is rumored to be giving the axe to the Country Bear Jamboree (which he cut out of DL already). Frankly, I don't see the difference or how it can be worse. It could also be that Billionaire Bill would put somone in charge that actually can save Disney's magic.......he is one of the few who has the deep pockets to get the job done. After all MicroSoft has a whopping $36 per share cash on hand. That's CASH !! Cold Hard Cash !! Sitting in the Bank earning a tear jerking 1.6%, just ripping apart MicroSaft's profit margin and return on equity ! I am sure Billionaire Bill is just starring at all that land Disney is sitting on, plus that beautiful media content Disney has (including ESPN), and OH MY GOD !!! ABC networks !!! WOW !!! what a way to rival AOL/Time Warner !!

 

[J. Thornhill]

I need more links. Anyone?

J.-

 

[Mop]

Firstly, I find it hard to believe that MSFT would pursue DIS considering how they've chosen to stay away from "content" for so long. This would be a major deviation from their long term business plan. On the other hand, there hasn't been a better time to change gears. If MSFT ever wants to get into "content", they're never going to get a better chance. Of course, they're trying to avoid alienating the DOJ, but they're hardly going to find a friendly DOJ then right now.

As for the logistics... Recent reports tell that MSFT has about $36bil in cash. That's the largest cash reserve for any corporation in history. But I doubt it's enough to buy DIS. Unless MSFT finds someone to lend them the rest of the cash (and I doubt Bill Gates would want to put MSFT in debt), I doubt that any such purchase would be all-cash. Furthermore, I know MSFT committed a substantial amoung of cash to help Comcast take over AT&T Broadband (we're talking around $10bil here). Now, is this "$36bil" MSFT has BEFORE or AFTER the $10bil they gave to Comcast?

Regardless, I think the DIS market cap is substantially higher than $36bil (if AOL can take a one-time accounting charge of $60bil without blinking, then DIS must be worth than $36bil).

Mop

 

[Another Voice]

Mr. Scoop, we are all eagerly awaiting your observations on Dino-Rama from your recent visit. Did you find the wild mouse coaster more Six Flags or more Disney?

 

[DVCDAVE]

DIS has a float of 2 billion 2 million, multiply times the $23 market price, its a market cap of a little over 46 billion. Further, MSFT has 900 million shares in treasury, thats an addional 62 Billion in capital. That 900 million is roughly 20% of the outstanding shares, so if you discount the market prices of MSFT 20%, that still leaves 49.68 billion of capital in treasury stock. Do a deal of part stock part cash, and Gates can have his car in Eisners parking spot tomarrow morning. OR do it all in a stock swap and still have Billions to burn.

 

[space42]

Scoop I would have to agree with you about the BAH.

I was there in early December. Went to MGM not expecting to like the hat at all. I was pleasantly surprised. Saw it during the day and night. Looks great at night. I just wish they could have found a better spot for it.

re: Micro$oft. Hmmmm, well Mr. Gates cant possibley do any worse of a job then the current management right?

 

[HBK]

Originally posted by thedscoop
...must not have ever been a very broad chasm between Six Flags and WDW to begin with... ...welcome to the wonderful world of "selective examples". We all use this falacious tool pretty well around this forum...you should fit in just fine...

I think there was a great difference, but based on these applicable examples (along with others not used), it seems the current management team is hell bent on giving us nothing more than a six flags.

We're not the ones who lowered the bar. It's management's fault the public is calling them on it.

 

[larworth]

I continue to be concerned about the parks becoming a smaller fish within a Disney mega media company. As its’ distance from the core increases there is an increased danger of reduced resource allocation and long-term shepardship. Plus, the potential “robbing Peter to pay Paul” dynamic, when the bigger fish is not carrying it’s weight.

Well, the parks would sure become a minnow within MSFT. Park results would make little difference to the MSFT bottom line, so there would be no real need to milk the parks in the name of meeting short-term earnings targets. Plus, a billion dollar capital spending budget would not cause them to break into a sweat. However, there is also the real possibility that the division could just fall into a black hole and operate on auto-pilot.
Anyone have any insight into how MSFT treats (management style) small operating units???

If I were Bill I would look at the risk/reward potential. While the rewards of investing in the parks won’t make or break MFST, to me the PR risks of letting them slide is huge. There is already plenty of MFST bashing out there, I sure wouldn’t want to add any fuel to the fire for the sake of a few extra billion $. Here, I finally have a product with the potential to make people smile instead of curse. I would ride it for all I could. It just might become that not-for-profit organization we’d all love to see.

***

Space42: my sentiments exactly on the hat

Scoop: I’ve heard of oversimplification. Surely, the test is not whether everything fits into one category or another, but the quality of the effort on average. If your kid always brought home A’s, how many C’s does it take before you know something’s changed?

 

[fklhou]

Before we get too excited, a takeover of Disney will be a major undertaking even for Microsoft. Disney's current capitalizaiton is $46 billion and Disney has $8.9 billion of debt. Any hostile deal would have to be a substantial premium to market. At even a 25% premium, this would be a $67 billion dollar deal. I can see Disney holding out for the 52 week high stock price ($35 oer share) which would raise the price to almost $80 billion. Somewhere along the way, Eisner's golden parachuet would be triggered and that would add to the costs. A billion here and a billion there and we are talking real money even for Bill Gates.