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Comcast Won't Join in Roy Disney's War

2/22/2004 07:00:00 PM Eastern

Disney's shareholder meeting next week will be a mere eight blocks from Comcast's Philadelphia headquarters. But Comcast is keeping its distance; it's Roy Disney's show.

Well before Comcast launched its hostile takeover bid for Disney, the entertainment giant's March 2 shareholder meeting was slated to be the site of a showdown with dissident shareholders, led by Roy Disney, nephew of founder Walt Disney and harsh critic of Disney CEO Michael Eisner. Roy has been campaigning for a shareholder vote against the reelection of Eisner and other directors to the board, something investors typically rubber-stamp.

President Brian Roberts is clearly exploiting the dissent Roy Disney has sparked, but he isn't getting too close. Comcast doesn't want investors to see its bid as tied to any particular event, particularly one where it has little control. "This is not our fight," says a Comcast advisor.

Comcast spent last week turning down the noise. As expected, the entertainment company's board formally rejected the bid as too low. The offer was initially worth $66 billion, or $26 per Disney share, but the fall of Comcast's stock has reduced its current value to $55 billion, or $23 per share. Meanwhile, Disney's price has risen to $26 per share.

Comcast brushed away the two stocks' market movements. responding that its initial offer was already a premium over Disney's pre-deal price. It is not inclined to boost its offer.

"We strongly believe we have presented a full and generous proposal," the Comcast advisor says. "We have to wait a while for that to sink in."

Of course, nobody wants to bid their own offer up, especially when a bidding war looks less and less likely. Viacom, Cox, News Corp., Liberty Media, and Time Warner are all waving away investors looking to see if they'll jump into an auction.

Comcast has focused a lot of attention on Washington, with lobbyists and executives courting regulators and legislators. It wants to combat growing anxiety over media consolidation that a Comcast/Disney combination would exacerbate.

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