Cable TV giant Comcast announced Wednesday that it was launching a surprise $66 billion bid to merge with Walt Disney, a deal that would create one of the largest media and distribution companies in the world.
The stunning proposal comes after private conversations earlier this week, in which Disney Chief Executive Officer Michael Eisner rejected Comcast"s request to begin merger negotiations, the cable company said. As a result, Comcast said it was bringing its offer to Disney"s board of directors into the public eye. "Given this (rejection), the only way for us to proceed is to make a public proposal directly to you and your Board," Comcast Chief Executive Officer Brian Roberts wrote in a letter to Eisner, made public Wednesday morning. "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."
Under the proposed deal, the company would issue 0.78 of a Comcast share for each Disney share, a total value of about $54 billion and a premium of about $5 billion above the closing price of the shares on Feb. 10. In addition, Comncast would assume about $11.9 billion in current Disney debt, for a total of about $66 billion. Disney shareholders would own about 42 percent of the company, Comcast said. If completed, the deal would create a media and distribution empire rivaling the size and influence of the post-America Online Time Warner, and would be sure to raise eyebrows across regulatory and public-interest circles.