Disney's Eisner says he is not in danger of losing CEO job

Investors, analysts told turnaround has begun

Comcast bidding for company

February 13, 2004|By Richard Verrier | Richard Verrier,ORLANDO SENTINEL

Capping a day in which the Walt Disney Co. did its best to put on a happy face, Walt Disney Chairman Michael Eisner defended his stewardship yesterday and dismissed suggestions that his days could be numbered.

Eisner, who is also chief executive officer, refused to discuss Comcast Corp.'s unsolicited $66 billion bid made Wednesday to take over the world's most famous entertainment company. But he scoffed at efforts by Comcast and others to portray him as a manager under siege, or claims made by Comcast and others that the Burbank, Calif.-based conglomerate is mismanaged, undervalued and underperforming.

"I'm not in the slightest bit beleaguered or battered ... [That's] ridiculous," Eisner said in an interview last night during a break from an analysts conference Disney is host to in Orlando, Fla.

Dressed casually in a gray blazer and Mickey Mouse tie, and appearing confident and at ease, Eisner added: "I think people respect the company and respect me."

Eisner indicated that Disney's board will carefully reviewed the Comcast offer. But he made clear that he believes Disney does not need to pair up with Comcast or anyone else.

"Disney is a solid, growing, creative family-oriented, quality-oriented company that has strong culture and a strong balance sheet and strong cash flows and, therefore, I feel pretty comfortable that we're on the right track."

"The board is very solidly behind the management of this company," he said.

That doesn't mean that Disney is ignoring the potential threat or the proposal. One source close to the company's board said that while directors view Comcast as a credible suitor, the general feeling is that its bid for Disney is too low to accept.

According to several high-placed sources, Disney retained lawyer Martin Lipton of Wachtell, Lipton, Rosen & Katz, Wall Street's best-known takeover defense specialist, yesterday.

The source close to the board said that, as of late yesterday, no directors' meeting had been scheduled, nor had the board formed an independent committee to evaluate Comcast's proposal.

Eisner's comments followed upbeat presentations to analysts and investors at the Contemporary Resort in Walt Disney World. The event was scheduled months ago, in part to tout Disney's quarterly results and improved earnings outlook for this year.

Instead, it's been overshadowed by Comcast's bold bid, and a sense, at least in some quarters, that Eisner's grip might be slipping.

Eisner has been fighting a campaign to oust him by former board members Roy Disney and Stanley Gold. They have accused him of mishandling key business relationships, including that with Pixar Animation Studios, which recently parted ways with Disney despite a long partnership that has resulted in some of the most lucrative movies in history.

Their campaign gained momentum yesterday when a leading shareholders advisory group urged Disney shareholders to vote against the re-election of Eisner and three other directors. On top of that came the Comcast offer, which appeared to be timed to take advantage of Eisner's vulnerability.

Eisner appeared to be far more relaxed yesterday than the day before, and even joked about the Comcast bid during a question-and-answer session.

"What was the other question? Acquisitions? Oh, we're buying Comcast," a response that drew laughter from the audience.

Eisner even made light of Disney's controversial parting with Pixar Animation and its chief, Steve Jobs, co-founder of Apple Computer Inc.

"He created the computer, or at least Windows, or whatever he created, and did a good job," Eisner said to laughter. "You'd be killing me today if you read the deal we offered them," he added.

Chief Financial Officer Tom Staggs also drew chuckles when he called Wednesday a "pretty uneventful day."

Eisner and his lieutenants were buoyed by the assessment of most analysts and investors yesterday that Comcast's all-stock bid was too low, given Disney's improved outlook.

The turnaround of Disney, from the recovery of the parks business to the rebuilding of the ABC network and the expansion of the Disney Channel in China, was a major theme during a series of detailed financial presentations by the company's various division heads.

That message appeared to resonate with Disney's intended audience.

"There's no sense of crisis here," said Hal Vogel of Vogel Capital Management. "They're really doing quite well."

Larry Haverty, an analyst with State Street Research, a Disney investor, agreed. "This is not a broken company.

Eisner garnered some particularly strong support yesterday from Disney's presiding director, George J. Mitchell. In an impassioned address to investors, the former U.S. senator from Maine said the board had adopted a series of reforms to make it more independent and gave Eisner credit for backing them.

"Our chairman, Michael Eisner, deserves some credit for this outcome. He listened, too," Mitchell said.

The Orlando Sentinel is a Tribune Publishing newspaper. Los Angeles Times staff writer James Bates contributed to this article.

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