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Disney Board approves $7B Pixar offer

post #1 of 37
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The Walt Disney Company is planning to announce as early as Tuesday the acquisition of Pixar Animation Studios in a stock transaction valued at about $7 billion, people briefed on the negotiations told the New York Times on Monday.

According to the report, Disney's board voted to give chief executive, Robert A. Iger, the authority to offer Apple and Pixar chief, Steven Jobs, about $59 a share for the company, these people said. The price would be at a slight premium over Monday's closing of $58.27 a share, which gave Pixar a market value of about $6.93 billion.

"Disney's negotiators were then expected to approach their counterparts at Pixar to reach a price, and Pixar's board could vote on the deal soon after that," said the Times. However, all of the people briefed on the negotiations cautioned that the deal could fall apart at any time. "This is tricky," one said. "All of the things have to be just right."

If the deal goes through, Pixar's chief creative officer and a former animator at Disney, John Lasseter, is expected to oversee the animation unit that would become part of Disney's filmed animation division. Jobs, meanwhile, would be given a seat on Disney's board.

It's also possible the deal would make Jobs the largest share holder of Disney stock.
post #2 of 37
In other words Steve would be taking over Disney rather than Disney taking over Pixar.
post #3 of 37
Quote:
Originally posted by AppleInsider
According to the report, Disney's board voted to give chief executive, Robert A. Iger, the authority to offer Apple and Pixar chief, Steven Jobs, about $59 a share for the company, these people said. The price would be at a slight premium over Monday's closing of $58.27 a share, which gave Pixar a market value of about $6.93 billion.

As someone said in a different thread, this would be a pretty crap deal for Pixar's shareholders. Wouldn't a bid such as this normally offer somewhat more than the company's share price? I suppose jobs is the 51% owner of pixar though, so whatever he says goes? So he may think that the meagre offer in monetary terms is worth it considering he would get a seat on Disney's board?
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post #4 of 37
Who's the leader of the club that's made for you and me?

S-T-E-V-E J-O-B-S!
post #5 of 37
Quote:
Originally posted by Mr. H
As someone said in a different thread, this would be a pretty crap deal for Pixar's shareholders. Wouldn't a bid such as this normally offer somewhat more than the company's share price? I suppose jobs is the 51% owner of pixar though, so whatever he says goes? So he may think that the meagre offer in monetary terms is worth it considering he would get a seat on Disney's board?

I think Jobs would have around 14%-15% of total shares hence making him the single largest share holder in the merger (taking over) of Pixar and Disney.
post #6 of 37
Quote:
Originally posted by markiv
I think Jobs would have around 14%-15% of total shares hence making him the single largest share holder in the merger (taking over) of Pixar and Disney.

Combined market cap would be 57 Billion, with steve owning 3.5 billion worth (about 6.1%).
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post #7 of 37
It looks like the share holders are not making a lot from it (the offer for the shares are just an inch above marked value) and Steve would have been able to become a member of the board of Disney without holding 10-20% of the shares. ANd I can´t imagine that Steve "I want to be in control of EVERYTHING" Jobs really like to give away control over Pixar....

Remember how this started: Steve and Eisner go at eachothers throaths, Pixar doesnt´renew their contract with Disney because of differences, Pixar goes looking for other distributer, can´t find anyone who can offer the same deal as Disney. Pixar returns to table with Disney.

We all know that Disney are having problems of their own, but it was Pixar who returned and the low offer for Pixar shares could be a sign of who is wearing the pants in this deal...

[EDIT: Member of board, not chairman of course...]
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post #8 of 37
Quote:
Originally posted by markiv
In other words Steve would be taking over Disney rather than Disney taking over Pixar.

No.
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post #9 of 37
Sad to see Steve sell out like this...Pixar would of been another Disney of the future yet the short term gain is all that is being looked at. Now the Disney name lives forever while the Pixar people keep it in business.....sad day indeed.

post #10 of 37
In the same way that NeXT remade the OS and thus the Mac, I believe that Pixar will be given ample room to completely remake Disney animation. Iger has said animation is the heart of Disney, and a key to turning around the company. As Pixar's quality, processes, and technology get incorporated into Disney, many more Pixar-developed stories will be released as movies or shorts or TV shows, and these stories and characters will drive theme parks and other content distribution avenues (TV, cable, etc).

What does Pixar get? If Lasseter is the head of animation, then it gets control back over sequels and its characters. And it gets the best tie-in merchandising (and increased brand awareness and mucho more profits). I think it's this last thing that drove SJ back to Disney as none of the other potential distributors could do it as well.
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post #11 of 37
The current price includes a run-up on rumors of the deal. Look at the price over the past 6 months - it has had a run-up. Disney will pay the fair market value for the company, but people have been expecting this action and hence bought up the stock, driving priuce higher. If no rumors had been swirling, the cuurent Pixr price would be quite a lot lower - July through October of last year, the stock was trading at around $45...


Quote:
Originally posted by Mr. H
As someone said in a different thread, this would be a pretty crap deal for Pixar's shareholders. Wouldn't a bid such as this normally offer somewhat more than the company's share price? I suppose jobs is the 51% owner of pixar though, so whatever he says goes? So he may think that the meagre offer in monetary terms is worth it considering he would get a seat on Disney's board?
post #12 of 37
Quote:
Originally posted by Anders
We all know that Disney are having problems of their own, but it was Pixar who returned and the low offer for Pixar shares could be a sign of who is wearing the pants in this deal...

You'll probably see the shareholders file a class-action lawsuit for failing to get the best price on the sale of Pixar. Always happens.

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post #13 of 37
Soon this place will be known as SteveInsider.
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post #14 of 37
I think this would be a sad deal. There is every chance that Disney will try to inject their culture into pixar and that will be the death of the refreshing creativity and story telling that we have come to expect from Pixar.

Only if Disney allows their animation division to run idependently from Disney culture will the Pixar Employees thrive and the hits will keep on coming.
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post #15 of 37
Quote:
Originally posted by Jamil
I think this would be a sad deal. There is every chance that Disney will try to inject their culture into pixar and that will be the death of the refreshing creativity and story telling that we have come to expect from Pixar.

Only if Disney allows their animation division to run idependently from Disney culture will the Pixar Employees thrive and the hits will keep on coming.


On the other hand, maybe people will soon be taking their kids to Pixarland in Anaheim... the happiest place in the Reality Distortion Field!

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post #16 of 37
Quote:
Originally posted by markiv
In other words Steve would be taking over Disney rather than Disney taking over Pixar.

No.
post #17 of 37
Quote:
Originally posted by ebolagp
The current price includes a run-up on rumors of the deal. Look at the price over the past 6 months - it has had a run-up. Disney will pay the fair market value for the company, but people have been expecting this action and hence bought up the stock, driving priuce higher. If no rumors had been swirling, the cuurent Pixr price would be quite a lot lower - July through October of last year, the stock was trading at around $45...

Yes. The price already includes the mark-up from the expected sale.
post #18 of 37
Quote:
Originally posted by e1618978
Combined market cap would be 57 Billion, with steve owning 3.5 billion worth (about 6.1%).

Correct. I wish people would get the most basic information right before posting.
post #19 of 37
Quote:
Originally posted by SpamSandwich
You'll probably see the shareholders file a class-action lawsuit for failing to get the best price on the sale of Pixar. Always happens.

No. They got a good deal.
post #20 of 37
I'm just concerned about the conflicts of interest that are now there. This is going to be very difficult for both Disney and Apple.

Jobs will have to recuse himself from many decisions being discussed, and made, at both companies.

As the article in the Times the other day said; Jobs spent vastly more time at Apple than he did at Pixar, because he didn't need to involve himself at Pixar, and the two companies didn't have too many areas of congruence. This isn't the case with Disney.
post #21 of 37
^ How's about using 1 post to refer to different people and not post 5 times in a row?
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post #22 of 37
ehh i like how pixar is considered to be controlled by jobs like Apple. Wherever Pixar is, Jobs name isnt far. If he was just on the board of Disney i think he loses influence... as he can be outvoted. and his name will not appear with everything that disney does consequently. There are two options that are good in my mind for jobs:

1. Dont merge
2. Merge and in a brilliant takeover move buy up as many shares of disney as possible gaining enough dominance to then make a coalition that controls disney and then the world!! mwahahahahaha /Evil Genius Takeover
post #23 of 37
Quote:
Originally posted by Gene Clean
^ How's about using 1 post to refer to different people and not post 5 times in a row?

Four, actually. The last post was in general.

I could have done that. But it takes less time to post individually than it takes to do it the other way.
post #24 of 37
Quote:
Originally posted by Anders

the low offer for Pixar shares could be a sign of who is wearing the pants in this deal...

[EDIT: Member of board, not chairman of course...]

Yeah, if somebody offered me 7 billion for my company, I'd laugh 'em right out of the home office!
(I realize, of course, despite my sarcasm, that it's all relative, eh?)

kc
post #25 of 37
As I said, the marked price is the same as DIsney offered:

Before the Pixar stocks FELL today they were at $58.27. Disney offered $59. If sjobs had the upper hand they would be sold for far far more.
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post #26 of 37
Quote:
Originally posted by Anders
As I said, the marked price is the same as DIsney offered:

Before the Pixar stocks FELL today they were at $58.27. Disney offered $59. If sjobs had the upper hand they would be sold for far far more.

That's not true. First, you are assuming that Jobs doesn't want to sell. Second, you are assuming that anyone but Jobs has the final say. Not true. He owns 50.6% of Pixar. He has the final say.

The value of Pixar is already built into the price of the stock. It has been going up in anticipation of, first, a distribution deal, and second, on this purchase.

Pixar is more closely valued at $50 per share. The rest is this anticipatory sale.

you can't look at the price of a stock and assume that much more could be gotten.
This is a high value already for a company that only comes out with a major production once every 18 months or so.

The question, now, is whether they can move this up to perhaps two major productions a year. Can they do it? This is a big question. If they can't, then Disney will have overpaid. This is already adding significantly to their debt load. When will it add value to the company? It has been said that it could take two to three years. That's a long time.
post #27 of 37
Quote:
Originally posted by melgross
That's not true. First, you are assuming that Jobs doesn't want to sell. Second, you are assuming that anyone but Jobs has the final say. Not true. He owns 50.6% of Pixar. He has the final say.

I was not talking about Jobs vs. rest of Pixars owners. I was talking about Pixar vs. Disney.

Quote:
Originally posted by melgross
The value of Pixar is already built into the price of the stock. It has been going up in anticipation of, first, a distribution deal, and second, on this purchase.

Pixar is more closely valued at $50 per share. The rest is this anticipatory sale.

you can't look at the price of a stock and assume that much more could be gotten.

I see it all the time: If a player want to get into a marked, secure a marked or in any other way see a strategic point in having the control of a company he will bid up the price of the stock until he has secured themselves the decisive part of that company.

If Pixar is a strategic good buy for Disney Pixars owners could have gotten a better deal IF NOT they had problems of their own. Which they have: Without this deal they were without a good distributer AND faced competition from sequals to their own box office successes. they would have huge problems selling the next movie:

Lets say their deal with Disney had ended now and they were to roll out Cars this summer with a new distributer against the new "Nemo II" or "Monster, Inc II", backed by Marlins, Nemos, Mikes and Sullies in every kid meal at McD, cheap DVDs of the first movie in every supermarked and a trailer in every commercial block. Who would win do you think? Disney may or may not win at the box office. Pixar would certainly not.

Jobs knows that and he had to find a deal with Disney. DIsney, even if they are having problems, are not so dependent on this deal as Pixar. Hence Disney has the upper hand in deciding the price of the buy-out.
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post #28 of 37
Its a done deal:

Disney Buys Pixar

CNN.com story

Steve will be on the Disney board, not a time intensive position at all. What if any Pixar responsibilities he keeps is about the only thing not mentioned.
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post #29 of 37
Update the information please.

Quote:
LOS ANGELES (Reuters) - The Walt Disney Co (DIS) has agreed to acquire Pixar Animation Studios (PIXR) in an all-stock transaction worth $7.4 billion expected to be completed by this summer, Disney said on Tuesday.

Pixar Chief Executive Steve Jobs will join Disney's board of directors. Under the agreement, 2.3 Disney shares will be issued for each Pixar share.

Pixar President Ed Catmull will serve as president of the combined Pixar and Disney animation studios, Disney said. Pixar Executive Vice President John Lasseter will be chief creative officer of the animation studios.
post #30 of 37
Quote:
2.3 Disney shares will be issued for each Pixar share.

The current stock ratio is 1:2.213, so the premium paid by Disney is nothing but a rounding error.
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post #31 of 37
Quote:
Originally posted by Anders
[B]I was not talking about Jobs vs. rest of Pixars owners. I was talking about Pixar vs. Disney.



I see it all the time: If a player want to get into a marked, secure a marked or in any other way see a strategic point in having the control of a company he will bid up the price of the stock until he has secured themselves the decisive part of that company.

That only works is there is more than one bidder. No one else came out at the last minute to make an offer. Therefore Jobs could have asked for more than Disney wanted to pay, and the deal would have been off. If that happened, Pixar's stock would have tumbled. Then Disney, or another, could have come in with a lowball bid, and picked the company up as a bargin. By the way, the price was a bit higher. Remember, those numbers we were seeing were just guesses.

Quote:
If Pixar is a strategic good buy for Disney Pixars owners could have gotten a better deal IF NOT they had problems of their own. Which they have: Without this deal they were without a good distributer AND faced competition from sequals to their own box office successes. they would have huge problems selling the next movie:

Lets say their deal with Disney had ended now and they were to roll out Cars this summer with a new distributer against the new "Nemo II" or "Monster, Inc II", backed by Marlins, Nemos, Mikes and Sullies in every kid meal at McD, cheap DVDs of the first movie in every supermarked and a trailer in every commercial block. Who would win do you think? Disney may or may not win at the box office. Pixar would certainly not.

That argument is wrong. First of all, their partnership includes Cars, Pixar could not wiggle out of it.

I'm not quite sure I understand what you are saying here. As I pointed out, Cars is a co-Disney production. Pixar can't do anything about that. The next picture Pixar is doing (I forget the name) is about a rat living in Paris. That wont be out for a year after Cars.

Many companies would be delighted to distribute Pixars films. They all have big marketing budgets. Time-Warner has been mentioned as one that is interested.

Quote:
Jobs knows that and he had to find a deal with Disney. DIsney, even if they are having problems, are not so dependent on this deal as Pixar. Hence Disney has the upper hand in deciding the price of the buy-out.

The fit between Pixar and Disney is the best, but it wouldn't have been the only one. What you are saying goes against what those in the industry have been saying. Disney needs this more than Pixar does. That's why they want to buy them out completely; so that no other company gets the chance.

I'm not so sure that it will be a good one for Apple, though.
post #32 of 37
My hypothetic "had" was just to show what would have happened a year from now. I don´t´know the film after Cars, so instead I used it as an example.

Disney have the backlog, the right to merchandise, to sequals and a pristine distribution and marketing system. Pixar has the right to come up with new ideas and even if they are good at it nothing beats the 500 pound gorilla in the corner when it wants to use all its muscles (See M$ vs. Apple early 90s). Pixar would never be able to get any distributer in the same class as Disney, its not out there.
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post #33 of 37
Quote:
Originally posted by Anders
My hypothetic "had" was just to show what would have happened a year from now. I don´t´know the film after Cars, so instead I used it as an example.

Disney have the backlog, the right to merchandise, to sequals and a pristine distribution and marketing system. Pixar has the right to come up with new ideas and even if they are good at it nothing beats the 500 pound gorilla in the corner when it wants to use all its muscles (See M$ vs. Apple early 90s). Pixar would never be able to get any distributer in the same class as Disney, its not out there.

The problem is that Pixar is, rightly, concerned that Disney will use those rights to produce lower quality versions of Pixars original films. Those films won't be as popular, and could, potentially, harm Pixar's reputation. So that could be a problem.

But Time-Warner, and others have equal distribution systems to Disney.

I think Jobs wanted to stay with them. He and Iger have known each other for years, and get along well.
post #34 of 37
Quote:
Originally posted by melgross
The problem is that Pixar is, rightly, concerned that Disney will use those rights to produce lower quality versions of Pixars original films. Those films won't be as popular, and could, potentially, harm Pixar's reputation. So that could be a problem.

But Time-Warner, and others have equal distribution systems to Disney.

I think Jobs wanted to stay with them. He and Iger have known each other for years, and get along well.

Just proves the old saw--- It ain't what you know, it's WHO you know.

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post #35 of 37
Quote:
Originally posted by SpamSandwich
Just proves the old saw--- It ain't what you know, it's WHO you know.

To a great extent, very true.
post #36 of 37
Quote:
Originally posted by melgross
That only works is there is more than one bidder. No one else came out at the last minute to make an offer. Therefore Jobs could have asked for more than Disney wanted to pay, and the deal would have been off. If that happened, Pixar's stock would have tumbled. Then Disney, or another, could have come in with a lowball bid, and picked the company up as a bargin. By the way, the price was a bit higher. Remember, those numbers we were seeing were just guesses.

Mel, I agree with most of what you have to say, esp. re the Apple stock price, however I do not agree with the above.

Steve Jobs still has a majority interest in Pixar and could and would simply reject any lowball offers. He is renowned as a very shrewd negotiator and would not take a lowball bid even if the stock did tumble.
post #37 of 37
Quote:
Originally posted by MacCentric
Mel, I agree with most of what you have to say, esp. re the Apple stock price, however I do not agree with the above.

Steve Jobs still has a majority interest in Pixar and could and would simply reject any lowball offers. He is renowned as a very shrewd negotiator and would not take a lowball bid even if the stock did tumble.

That's true to a certain extent. But if the stock tumbled, as it could have, then a "White Knight", as they are called, could come up and buy enough stock to stop that. Jobs is still subject to shareholder action, as this is a public company. If he is seen to be acting against shareholder interests, he could be removed. These things have happened numerous times. If it could be shown that this new low bid was the best that could be obtained, then the shareholders would have a right to force the issue, and have Jobs show why he is not accepting the offer. He doesn't have unlimited rights.

Also, both Lasseter and Catmull have defacto veto. If either or both refuse to go along with a deal, they could leave. That would drastically lower, or even (if they both left) destroy it. (The company, and its value).

He said that the present deal would not have been done if both of them were not enthusiastic.

He still has to have this deal approved by the board, which will send its recomendation to the stockholders. If a large number vote against it, and start a lawsuit, the whole process stops.

This particular deal is a good one for Pixar. But other ones might not have been so, especially the senario I have just mentioned.
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