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Comcast given silver bullet as eisner stays { March 5 2004 } Original Source Link: (May no longer be active)
http://business.timesonline.co.uk/article/0,,9071-1027108,00.htmlhttp://business.timesonline.co.uk/article/0,,9071-1027108,00.html
March 05, 2004
Comcast given ‘silver bullet’ as Eisner stays
By Nic Hopkins
COMCAST, the US cable group, moved a step closer to succeeding with its hostile $48 billion (£26 billion) bid for the Walt Disney Company yesterday after the troubled media conglomerate failed to crush a shareholder revolt by splitting the roles of chairman and chief executive.
Analysts and investors expressed their dismay at the decision of Disney’s board to install George Mitchell as chairman but retain Michael Eisner as chief executive after an unprecedented 43 per cent vote against him at its annual shareholder meeting.
The scale of the backlash was widely seen as a vote of no confidence in Mr Eisner, who has been Disney’s chairman and chief executive since 1984.
“I can’t imagine a chief executive who gets 43 per cent of shareholder votes against him is still in his role the morning after,” Rich Greenfield, an analyst with Fulcrum Global Partners in New York, said.
Charles Elson, director of the Weinberg Centre for Corporate Governance at the University of Delaware, said: “It’s got to be a management change one way or the other.”
A spokeswoman for Institutional Shareholder Services, which represents many of America’s largest investors, observed: “If the Disney board believes this is the silver bullet to fix all the problems, they are sort of mistaken.”
Sources close to Comcast were celebrating in the wake of the board’s decision, which they said would continue to feed instability at Disney. “As far as the bid is concerned, this is the best possible outcome from the shareholder meeting. There is a lack of certainty that will play directly into Comcast’s hands,” one source noted.
Comcast launched the hostile all-shares bid on February 11, but was immediately under pressure to increase the offer in the face of a strong Disney share price. However, the shares have deflated over the past week as the campaign to unseat Mr Eisner gathered pace.
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