02.20.2004 12:00 PM
Comcast and Disney in waiting game

Comcast says it won’t sweeten its $50 billion plus offer for the Walt Disney Company. Disney’s shareholders say it must and believe it will. Analysts say Comcast is betting that Disney’s stock will fall below the bid price as time passes and no new bidder emerges.

Comcast is being careful not to offer more than one share of its stock for each share of Disney because any higher offer would leave Comcast with less than 50 percent of the combined company. Its current offer is for 0.78 share of Comcast for each Disney share.

“I think Comcast will have to come up with another offer,’’ which could include a cash component,” Dennis Leibowitz, who heads Act II Partners, a hedge fund that specializes in media, told the New York Times. “But I believe they’ll try to increase the bid with cash because of the potential dilution in issuing shares, which would worry their shareholders. And cash would assure Disney shareholders of an acceptable value regardless of the share price of Comcast stock.”

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