Disney takeover bid rejected

By Gary Gentile
Associated Press

The board of Disney said Comcast's offer to swap shares undervalued Disney by at least $6.6 billion. Associated Press

The unanimous rejection came less than a week after the Disney board said it would carefully consider the Comcast offer.

The board in a statement expressed support for Michael Eisner, current chairman and chief executive, and said the company's current structure and strategy is sufficient to maximize shareholder value.

"We are committed to creating shareholder value now and in the future and will carefully consider any legitimate proposal that would accomplish that objective," the statement read.

"In any proposal by Comcast, or any other company, the board will consider and assess the value to be received in exchange for the shares of Disney, and also the appropriate premium to reflect the full value of Disney."

The board noted that Comcast's offer to swap 0.78 of a share of Comcast for each Disney share undervalued the company by at least $6.6 billion based on the closing prices of both companies the day after Comcast announced its offer.

Disney's shares rose 15 percent Wednesday — the day of Comcast's offer — then rose 1.4 percent on Thursday, and dropped 3.8 percent on Friday to close at $26.92 on the New York Stock Exchange.

Comcast's shares fell 12 percent from Wednesday through Friday to close at $29.90 on the Nasdaq Stock Market.

Comcast said in a statement yesterday its offer "reflects a full and generous valuation based upon Disney's prospects and performance over a long period of time, representing a significant premium over Disney's unaffected share price during any relevant measurement period during the past three years."