Comcast Tries to Buy Disney

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2004-2-19

This is Bob Doughty with the VOA Special English Economics
Report.

Takeovers are a common part of business. One company offers to
buy a controlling share of stock in another. But that other company
may not want to be bought. What then?

Last week, in the United States, Comcast offered to buy the Walt
Disney Company. Disney did not ask for the offer. So it is
considered a hostile takeover attempt.

Comcast is the largest provider of cable television in the United
States. More than twenty-one million people buy its service. Disney
makes films and many other media products. It operates theme parks
around the world. And it owns major radio and television broadcast
companies in the United States.

In its proposal, Comcast estimated the value of Disney at
sixty-six-thousand-million dollars. Comcast offered to pay for the
deal with shares of stock. It offered to trade point-seven-eight of
a Comcast share for each Disney share.

Under the offer, Disney shareholders would own forty-two percent
of the combined company. But the price of Disney stock went up after
the offer, while shares in Comcast went down.

This week the Disney board of directors rejected the offer. It
says Disney is worth more than Comcast is offering.

Disney shareholders will meet in Philadelphia for their yearly
meeting on March third. At that time, they will vote for members of
the board of directors.

Former board members Roy Disney and Stanley Gold say they will
ask shareholders not to re-elect Disney Chairman Michael Eisner to
the board. Mister Eisner has led the company since
nineteen-eighty-four. He has angered many people. Comcast might be
in a better position to take over Disney without Mister Eisner.

A deal with Disney would create
the biggest media company in the world, bigger than Time Warner.

In a separate development, Disney announced this week that it
will buy the Muppets. Disney will pay the Jim Henson Company
ninety-million dollars for the rights to Kermit the Frog, Miss Piggy
and other characters.

These will join the famous Disney
characters like Mickey Mouse.

And, in other business news this week, Cingular Wireless offered
to buy A-T-and-T Wireless. The deal would create the biggest system
for wireless telephone in America. Cingular is jointly held by two
companies, S-B-C Communications and Bell South. Earlier, Vodafone of
Britain made an unsuccessful offer to buy A-T-and-T Wireless.

This VOA Special English Economics Report was written by Mario
Ritter. This is Bob Doughty.


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