Comcast Makes Surprise Bid to Buy Disney
"We have long maintained that the inherent value in Disney's assets has not been realized by current management and that this Board has failed to take the necessary steps to restore long-term shareholder value and to hold management accountable for its failures," Disney and Gold added. "We believe those failures have made Disney an attractive target for those that recognize, as we do, that with the right leadership the extremely valuable assets of Disney can be properly utilized to create lasting and significant value.
"Today's action by Comcast makes it more important than ever that shareholders send a message to management and the Board by withholding their votes on Michael Eisner, John Bryson, George Mitchell and Judith Estrin. Disney's shareholders deserve a board that looks at what is best for the company and its shareholders."
Moreover, Disney and Gold are extremely pleased with the ISS recommendation. "ISS' recommendation is an important independent validation of our campaign's primary theme that real change is needed in the Walt Disney Co. boardroom," Disney and Gold said. "With respect to recent changes in corporate governance practices at Disney, it is noteworthy that ISS said in its report that '[t]he withhold vote recommendation on Mr. Eisner is meant as a signal to try a little harder, not just on paper.' We agree with ISS' view that 'shareholders will be best served by cracking open the door to the boardroom.'"
Disney and Gold also believe it is important that shareholders take note that ISS points out in its report that:
'Based on a peer group of media, hotel, restaurant and leisure companies, the ratio of Net Operating Profits After Taxes to Invested Capital was below the lowest quartile for all [the last] five years.'
"This measure of financial performance spotlights the long-term deterioration of the Disney business under Mr. Eisner's leadership. We continue to believe there is a great deal of intrinsic value in the Company that is not being realized," they said.
The ISS report also states:
"At the end of the day, all roads lead back to Eisner," the ISS report continues. "For 20 years Disney's revolving door for board members and management has had one constant -- Mr. Eisner. The boardroom battles and management departures, which pre-date the Disney/Gold campaign, are disappointing, expensive, distracting, and not in the best interest of shareholders. If there were ever a case forseparating the roles of chairman and ceo, this company is the poster child."
"We couldn't agree more," Disney and Gold stated. "We urge shareholders to take heed of the ISS recommendation on Mr. Eisner by withholding their vote on his reelection to the Disney Board. We further urge that although not recommended in the ISS report shareholders also withhold their votes on the reelection of John Bryson, George Mitchell and Judith Estrin as directors of the Walt Disney Co."
Amid stronger than expected first quarter earnings on Wednesday due to terrific home entertainment sales from FINDING NEMO, PIRATES OF THE CARIBBEAN and FREAKY FRIDAY, Disney released the following statement regarding the ISS recommendation:
"While we welcome ISS' recommendations with respect to our non-management directors, we find its position inexplicable and unjustified with respect to Michael Eisner, since he led the very changes that resulted in a board dominated by independent directors. The Walt Disney Board exceeds the guidelines set by the NYSE with respect to corporate governance standards, and this would not have been possible without Michael Eisner's commitment to governance and transparency."
Disney reported net income of $688 million, or 33 cents per share, in the three months ended Dec. 31 compared to $36 million, or 2 cents per share, in the same period a year earlier