Disney rejects Comcast offer

The Walt Disney Co. board of directors voted unanimously Monday to reject Comcast Corp.’s $56 billion bid, saying the offer was too low, the company said in a statement released Monday night.

The Disney board received the offer only last week and had been expected to review it for several weeks. But in the statement, the company made clear that the offer of 0.78 Comcast shares for each Disney share was insufficient, particularly because Disney’s stock has risen since Comcast made its surprise bid public Wednesday.

“The board noted that .78 of a share of Comcast is selling in the market for $3.60 less than the market price of a share of Disney,” the company statement said.

The board also expressed confidence in Disney chief executive Michael Eisner, who has been harshly criticized by former board member Roy Disney. “The Board has confidence in the business financial and creative direction of Disney under the leadership of Michael Eisner and his management team.”

Although it rejected Comcast’s original bid, the Disney board did leave itself open to a sweetened offer. “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 said.

Comcast gave no indication Monday night that it would immediately raise its offer. “We maintain the belief that our merger proposal represents a sound and compelling proposition for both sets of shareholders,” a Comcast spokeswoman said in a statement.

Regarding the Disney board statement demanding a premium for the company, the Comcast statement said: “Our proposal to acquire the Walt Disney Co. 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 share price before the bid during the last three years.”

Comcast has other options. It can pull the bid off the table or do an end-run around the Disney board, taking its offer directly to shareholders, who are scheduled to meet March 3 in Philadelphia.

Analysts have said because Comcast unveiled its bid it will have to raise the offer in order to win Disney, a media giant that includes movie studios, the ABC television network and ESPN, the popular cable sports network. Comcast has walked away from big deals in the past, so it is not clear if the company will raise its offer to the equivalent of $32 a share or more that Wall Street is expecting.