Comcast Makes a Hostile $66 Bil. Bid for Disney

NEW YORK In the middle of a tense power struggle with Roy E. Disney and following the unraveling of the relationship with box office animation champ Pixar, beleaguered Walt Disney Co. CEO Michael Eisner received yet another blow this morning from Comcast president and CEO Brian Roberts, who wants to take over his company.

Following a conversation earlier this week in which Eisner apparently refused Roberts’ proposal for a merger, Roberts decided to make a public $66 billion pitch to Eisner and the Walt Disney board of directors, detailing how the entertainment giant and the cable conglomerate could together create a company more valuable than either would be alone.

“I am writing following our conversation earlier this week in which I proposed that we enter into discussions to merge Disney and Comcast to create a premier entertainment and communications company,” Roberts wrote. “It is unfortunate that you are not willing to do so. Given this, the only way for us to proceed is to make a public proposal directly to you and your board.”

Under the terms of the proposed deal, Roberts is offering $54 billion in stock for the Walt Disney properties, which include movie and television studios, theme parks, ABC, ESPN and several other cable networks. Moreover, Comcast said it would assume $11.9 billion in Disney’s debt, which takes the value of the deal to $66 billion.

As the largest cable operator in the U.S., Comcast brings more than 21 million cable subscribers to the table as well as 5 million high-speed Internet subscribers.

In his letter, Roberts points out the Comcast assets while playing on Eisner’s desire for Disney to be technologically competitive in how it creates and distributes its content.

“We believe this combination helps accelerate the realization of that goal, whether through existing distribution channels and technologies such as video-on-demand and broadband video streaming or through emerging technologies still in development, to the benefit of all our shareholders, customers and employees,” he wrote. “Together, as an integrated distribution and content company, we will be best positioned to meet our respective competitive challenges.”

It is unclear whether Comcast’s bid is related at all to serious complaints brought by Roy E. Disney that Eisner is running his family’s company into the ground. Disney, nephew of Walt and son of Walt’s brother and partner, Roy Disney, as well as a former animation chief and board member, along with fellow ex-board member Stanley E. Gold, have been running a campaign to unseat Eisner as CEO of Disney since late last year.