Top Walt Disney Co. executives focused on the company’s financial outlook in a presentation today to analysts and investors eager to grill chief executive Michael Eisner later in the day about Comcast Corp.’s hostile takeover bid.
CFO Tom Staggs pointedly avoided mentioning Comcast’s surprise $50 billion bid, eliciting chuckles from the audience when he called Wednesday a “pretty uneventful day.”
“We realize our overriding goal is to manage the Walt Disney Co. in the best interests of our shareholders,” Staggs said.
Eisner, 61, has overseen substantial growth at Disney in nearly 20 years as CEO. But the share price has stumbled in recent years, and Roy Disney, the nephew of company founder Walt Disney, has spearheaded a move to oust Eisner from the board.
Comcast’s bid for Disney puts still more pressure on Eisner. The top U.S. cable TV operator said it launched its hostile bid after Eisner refused to enter talks.
Institutional Shareholder Services recommended on Wednesday that Disney shareholders withhold their vote to re-elect Eisner to the board, to show their disapproval with Eisner and Disney’s corporate governance.
Thursday’s presentations marked the second day of Disney’s annual two-day investors’ conference, held at Walt Disney World in Orlando, Fla. Disney has traditionally used the annual forum as a pep rally to instill confidence among its vast array of shareholders.
Executives stuck to the script in morning sessions. Disney president/COO Robert Iger told analysts the company was poised for a growth spurt.
“We believe the company’s performance in 2003 and the strong outlook for 2004 signal the beginning of the next period of growth for the company,” he said.
But investors’ focus was elsewhere as they hoped that George Mitchell, the presiding director of Disney’s board, in a luncheon address on corporate governance topics, would also shed light on Eisner’s status.
Before the luncheon, Mitchell told Reuters the company was committed to keeping shareholders’ best interest in mind.
“We’ve asked for a thorough review,” he said. “When we receive the analysis and review, we will meet, deliberate on it and make what we hope will be the appropriate response in the best interest of the company’s shareholders.”
John Bryson, chairman/CEO of Ediston International, who holds a Disney board seat, told Reuters in Houston, Texas, that “We just want to figure out the best path forward.”
One analyst was cold toward Comcast’s offer. “There’s a reasonable probability Comcast will not make it,” said Hal Vogel of Vogel Capital Management. “Financially they are not coming with tremendous power.”
Sander Morris Harris analyst David Miller, who was at the meeting, said he believed it was unlikely a white knight would emerge to rescue Disney from Comcast, but other options remained.
“There were other defensive and offensive moves Disney can make,” he said, speculating that Disney could raise cash by selling off its radio properties and offering a dividend.
Shares of Disney, which rose nearly 15% on Wednesday to their highest level since July 2001, gained another 2% today, up 55 cents at $28.15 in the early afternoon. Shares of Comcast fell nearly 3% to $30.30, after dropping 8% on Thursday.
Comcast’s offer included $54 billion in stock and the balance in debt assumption. Analysts predict the offer will have to be recalculated in light of the value change. Some say that the Comcast offer may open the door for other to take a crack at Disney.