Comcast Makes Merger Offer To Disney

(February 11, 2004) New York, NY--Comcast Corporation has made a proposal to The Walt Disney Company to merge the two companies in a tax-free transaction. According to Comcast, the combination would create one of the world’s leading entertainment and communications companies with an unparalleled distribution platform and an extraordinary portfolio of content assets. The new company would have a presence in all of the nation’s top 25 markets, and would propel broadband forward.
The offer has not come without controversy. Originally, Comcast chief executive Brian Roberts made the offer directly to Disney chief executive Michael Eisner, who rejected it. Roberts today issued a letter proposing the merger to Disney's board. The board has been embroiled in a push for the resignation of Eisner led by Roy Disney, a nephew of Disney co-founder Walt Disney.
Comcast’s proposal values Disney at $66 billion, which includes assumption of $11.9 billion of Disney’s net debt, offering a multiple of approximately 14 times Disney’s 2004 estimated EBITDA.
"This is a unique opportunity for all shareholders of Comcast and Disney to create a new leader of the entertainment and communications industry," said Roberts in a press release issued about the merger. "Not only would this merger create significant shareholder value, but it would also position the combined company to compete vigorously with other entertainment and communications companies, including newly created integrated distribution/content providers."
Roberts employed similar tactics in order to make his company ultimately successful in the acquisition of AT&T Broadband in 2001.
Comcast Corporation