In a deal that could transform the media industry, US cable giant Comcast today announced a $66 billion bid to acquire beleaguered entertainment company, Disney.
The company offered the deal to Disney CEO Michael Eisner earlier this week. Comcast said it has decided to publicise the offer "in light of Eisner's refusal to consider the proposal".
In a letter to Eisner following the latter's refusal to discuss the deal, Comcast said: "Together, we would unite the country's premier cable provider with Disney's leading filmed entertainment, media networks and theme park properties."
Adding: "We have a wonderful opportunity to create a company that combines distribution and content in a way that is far stronger and more valuable than either Disney or Comcast can be standing alone."
Comcast is offering a $54.1 billion stock swap, and is prepared to assume Disney's outstanding $11.9 billion in debt. Combining the two companies would create the world's largest entertainment and communications company. Disney shareholders would own 42 per cent of the combined company, according to Comcast.
Comcast said the combined company would have an "unparalleled distribution platform and an extraordinary portfolio of content assets."
Comcast president and CEO Brian Roberts said: "This is a unique opportunity for all shareholders of Comcast and Disney to create a new leader of the entertainment and communications industry. 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."
"Our management team has a proven track record of successful integration of our merger partners," said Roberts. The company acquired AT&T Broadband fifteen months ago. Twice the size of Comcast on its acquisition, performance of the merged companies has "exceeded expectations", Comcast said in a statement.
"I know Disney's businesses very well," said Steve Burke, President of Comcast Cable. "And I am confident that when we put those great brands and programming assets together with our distribution, there will be significant opportunities to produce compelling returns for shareholders."
The bidding company will hold a press conference at 11am (Eastern Time, c. 4pm GMT) to detail its merger discussions with Disney.
Disney will announce its earnings after the markets close today. Eisner and his board are understood to be in damage control mode following Apple and Pixar CEO Steve Jobs' decision to end talks between Pixar and Disney. Pixar's movies have been a gold-mine to Disney, accounting for almost half that company's gross income.
Disney CEO Eisner is understood to be under great pressure to relinquish his post.
The pressure is evidently growing. The London Evening Standard reports the Disney board has said that "it is actively considering the question of who might succeed him".