Disney board rejects offer from Comcast Corp., but says higher bid would be considered

<br>LOS ANGELES (AP) _ The Walt Disney Company rejected Comcast Corp.'s takeover bid, but it also kept the cable giant's hopes alive by indicating more money might do the trick. <br><br>The board's

Tuesday, February 17th 2004, 12:00 am

By: News On 6

LOS ANGELES (AP) _ The Walt Disney Company rejected Comcast Corp.'s takeover bid, but it also kept the cable giant's hopes alive by indicating more money might do the trick.

The board's unanimous rejection Monday came one week after Disney chief executive Michael Eisner rebuffed an offer for talks that came from Comcast chairman Brian Roberts in a brief phone call.

Comcast responded Monday and said the offer still stands.

In a statement, the Disney board clearly showed it was keeping all options open.

``We are committed to creating shareholder value now and in the future and will carefully consider any legitimate proposal that would accomplish that objective,'' the statement read.

``In any proposal by Comcast, or any other company, the board will consider and assess the value to be received in exchange for the shares of Disney, and also the appropriate premium to reflect the full value of Disney.''

The board noted that Comcast's offer to swap 0.78 of a share of Comcast for each Disney share undervalued the company by at least $6.6 billion based on the closing prices of both companies the day after Comcast announced its offer.

Disney's shares rose 15 percent last Wednesday _ the day of Comcast's offer _ then rose 1.4 percent on Thursday, and dropped 3.8 percent on Friday to close at $26.92 on the New York Stock Exchange.

Comcast's shares fell 12 percent from Wednesday through Friday to close at $29.90 on the Nasdaq Stock Market.

Comcast said in a statement Monday its offer ``reflects a full and generous valuation based upon Disney's prospects and performance over a long period of time, representing a significant premium over Disney's unaffected share price during any relevant measurement period over the last three years.

``We maintain the belief that our merger proposal represents a sound and compelling proposition for both sets of shareholders,'' the statement said.

Comcast's bid was initially valued at $54 billion, with Disney shareholders retaining 42 percent ownership of the combined company. Comcast also said it would assume $11.9 billion in debt from Disney, which owns ABC, ESPN, movie studios and theme parks.

The value of the offer shrank to about $47 billion based on the company's share prices Friday. Stock markets were closed for the Presidents Day holiday Monday.

Disney's board said last week it would ``carefully evaluate'' Comcast's proposal. Analysts have said Comcast would have to offer more than $30 per share before Disney would consider a deal.

Last week, Disney executives outlined growth plans and estimated that earnings per share would grow by more than 30 percent this year and by double digits through 2007.

Disney and Comcast together had $45 billion in revenues last year. If a deal had been reached to combine the companies, they would edge out Time Warner, which had $39.6 billion in revenues last year.