Possible Takeover of Disney

[pwwhitehead]

In my national news paper The Times in the Uk.I financial reporter covered the fact that Disney have had a bad time recently.He covered various loss making ventures the poor showing of film releases and the demise of the ABC channel.The upshot being that Disney could become the target of a hostile takeover.He named Microsoft and Bertlesmann as possible companies.

What is the real possibility of this.You guys over the pond get more detailed news on USA business matters.Also how would a takeover effect my holding in DVC.

 

[Granny]

Rumors of takeovers and mergers surface constantly in this country. Even the financial section of the newspapers has to help sell papers, and sometimes they print every rumor that comes along.

That is not to say that the rumor is untrue. But Disney is a part of a HUGE conglomerate and I don't see anyone taking them over. Now if the company thought Disney would be a drag on their bottom line for the next several years, they could look to spin off Disney.

But it doesn't seem like a good fit for Microsoft. I don't know much about Bertlesmann. Couldn't even find them on a stock search.

In any event, the DVC should not be affected since we have a contract for our ownership. What could be affected is how the parks are run, perks, and other things that made us buy DVC in the first place.

 

[Eck45]

That is an interesting article, but I can't see Disney being "taken over" anytime soon. And not by the companies named in the article.

For one, Microsoft is a software computer company, and would be totally out of their business niche in acquiring a company like Disney. They would be able to update computer system and put in some cool exibits in tomorrowland, but I don't think they would have any idea how to run a billion dollar operation cosisting of hotels, theme parks, transportation, television, movies, etc.

Bertlesmann is would fall into the same problem. They would not have the know how to run that type of operation.

Personally, I couldn't see any company buying Disney. The cost would be unheard of (50,60,70 Billion ??). And if you buy Disney, you get way more than just Disney and its theme park operations.

I could possible see Disney divesting itself of some of its lagging subsidiaries, (ex. ABC). That would bring up the share price, and lower operating costs, while bringing the company more in line with its core operations, but even that would be surprising.

I think that the writer of that article was being a bit fanciful and not really looking at how the business is run.

It makes for an interesting artilce though.

 

[infobahn]

An Editor at Large from Fortune magazine was on CNN this morning and stated there was nothing to the rumor.

 

[drusba]

It is very typical when the stock price falls for a major conglomerate, as Disney's has since 9/11, that rumors develop of a possible takeover (right now you need a computer to add up the number of companies undergoing "takeover" rumors). In fact, the Microsoft one has been cropping up for at least a year or more (and with Microsoft's existing antitrust problems, and currently being the most-hated company by government trust busters who would have to approve any such takeover, it is not likely Microsoft would even attempt such a thing at this time). The rumors mean nothing until you start to see irrational stock price movements when real inside information starts to leak.

A takeover would have no direct impact on your DVC interest (which is managed by a subdidiary of Disney) as they cannot come in and change the deal that has been made (and would have no reason to). Where you could see an impact is mainly on what a new owner would do with the parks.

 

[pwwhitehead]

thanks for all your informed comments.I personally would not wish to see DVC taken away from the Disney.I personally believe the reason people buy into this venture is the value and the link with Disney Parks and the quality this provides.Don't get me wrong Disney like all largs companies want to make profits.I just believe Disney offers that little bit extra due to the herirage of the company

 

[mikesmom]

Actually, the theme parks, DVC, etc. (the things we think of when you say "Disney") are in good shape. (as in money makers). What Disney does have problems with is other subsidiaries. Television has problems (lowered ratings and ad revenue is down across the board) and the movie business hasn't had a really big hit lately - they took a real bath on Pearl Harbor. They've also had to buyout some exiting execs that Eisner couldn't get along with. (e.g. Jeff Katzenbaum)

What you are hearing on the financial channels around here is that Disney needs a real management shake up to get things straightened out.

 

[crisi]

Eisner has certainly lost his glow. I think he'll get the boot shortly.

Microsoft would love to get into the entertainment business - they think they compete with AOL Time Warner - they are making forays into that area - but don't look for them to make any high profile acquisitions - their relationship with the JD and SEC makes them a little gunshy - besides, they have a JV with NBC that makes ABC a poor fit - they would have to divest themselves of MSNBC - and probably pay big bucks to NBC to get out of it.

Disney hit their 5 year low after Sept 11th, and has not yet recovered, but the stock price has gone up since then, and they did not loose significant value compared to some firms with the recession (can you say "eToys"). They have held pretty steady for the past 5 years - their stockholders aren't making money - but they aren't losing it either.

The biggest challenge Disney faces is the copyright expiring on Mickey. Clinton delayed it for them for about 20 years.