Disney buying Pixar? Yes, it's true! About This Page:

[poohmaine]

http://money.cnn.com/2006/01/19/news...ex.htm?cnn=yes

I have mixed feelings.

Maybe Steve Jobs can bring Disney movies back to their level of excellence and put a stop to all the low budget, crappy DVD sequels and the out-of-control mass marketing of merchandise. But since he runs two companies already, would he be able to devote enough time to Disney?

Wouldn't it be great if they made John Lassiter President of Disney animation?

[lauren-roxy]

I think it would be great!!!

[Dave Marx]

Putting Lassiter in charge of Disney Animation could be really great. It's about the closest thing to defrosting and reviving Walt that I can imagine. [img]/ubb/images/graemlins/wink.gif[/img]

As to Steve Jobs... He'd be in line to become Disney's Chairman of the Board, but would he be stretching himself too thinly, since he's also chairman of Apple Computer? If we can judge by the way he's run Pixar and Apple Computer, it's probably both a good thing and a bad thing. Good (or great) in that he really understands how to encourage creativity and innovation, and understands the value of nurturing customer loyalty. Also great (for the shareholders) in that he knows how to charge top dollar for those products, and to be very selective about how (or even whether) the company licenses its products to other companies. He's probably as close as you can come to a cross between Walt and Roy Disney. Bad? From the consumer/Disney loyalist perspective, some of those good things might hurt us really bad in the wallet. [img]/ubb/images/graemlins/wink.gif[/img]

[BritDisFan]

A very interesting read, [img]/ubb/images/graemlins/thanx.gif[/img].

Karen

[lorilovestigger]

I read that on Yahoo the other day. I'm wondering if Pixar stock will go up or down if Disney buys them. I was thinking about buying a share of Pixar for my DD's birthday.

Lori

[Dave Marx]

[ QUOTE ]
I read that on Yahoo the other day. I'm wondering if Pixar stock will go up or down if Disney buys them. I was thinking about buying a share of Pixar for my DD's birthday.

Lori

[/ QUOTE ]

You're lucky, in that you won't be risking a whole lot. Now, if you were buying 1,000 shares...

Based on current share prices, you can expect to get two to three Disney shares for one share of Pixar.

Theoretically, Disney can swallow Pixar whole without a belch - the Disney company's market capitalization is over $48 billion, while Pixar's is about $7 billion, and in terms of real value, Pixar's capitalization is way higher than it should be. That doesn't mean the market wouldn't respond emotionally for a while - over-penalizing Disney share prices if they think Disney is paying too much, over-inflating Disney share prices if they think acquiring Pixar will have miraculous benefits.

The Price/Earnings ratio at Pixar is currently close to 50% (way high), while Disney's is about 21%. I can't see Disney paying a whole lot more than the current price. Not only would there be huge criticism from Wall Street and Disney investors, but Pixar shareholders would be getting a great deal. In terms of real value, all things being equal, a Pixar share shouldn't cost any more than a Disney share (and probably less). If there was less "irrational exuberance" about Pixar, the price per share would be much lower. Getting two or three Disney shares for a Pixar share is a great deal.

I can see Disney shares dropping by about 10% on "dilution" - more than that is inappropriate, imho. Pixar shares will probably go up, should rumors of a sale become stronger.

[boosmom96]

Interesting article from our local paper. (SF Chronicle) Good list of prons and cons for Jobs.
Pixar article from the SF Chronicle's Business section.

[Dave Marx]

[ QUOTE ]
Interesting article from our local paper. (SF Chronicle) Good list of prons and cons for Jobs.[/url]

[/ QUOTE ]

The only response in that article that puzzles me is the analyst who thinks Jobs as Disney Chairman would put a crimp in iTunes growth over at Apple.

Everyone in Hollywood has been in bed with everyone else over the years. And when they're not doing that, they're constantly making deals with each other. :::rimshot::: Sharing production costs on a film that seems too risky for one studio to swallow is just one example (Disney owned a piece of Warner's Lord of the Rings through Miramax's earlier deal with Peter Jackson, fer instance). Often, you'll see Buena Vista Video distributing DVDs by Warners, Fox and other studios. ABC carries network shows produced by Warners, the WB carries Disney-produced shows, ABC's networks (cable and broadcast) are carried on Warner Cable, and so it goes.

What's more, Jobs being involved with a deal at one company on which he serves on the board by law must be independent of his role at another company where he serves on the board. Everyone in business understands this.

So long as iTunes remains as successful as it is, everyone in the entertainment business will be lining up to do business with Apple, and Disney has to be treated with the same arms-length relationship that every other company receives. Otherwise, it's deuling entertainment and securities lawyers at 10 paces - not a pretty picture at all.

[MattUGA]

The deal is basically done. Jobs gets on the board and Lasseter becomes head of Disney animation.

http://www.variety.com/index.asp?layout=...yID=18&cs=1

You might not can read the entire story since it's a paysite but keep an ear out.

[ladyt]

I heard they bought it yesterday for about $7 billion.

[MattUGA]

$59 a share is the current deal. I heard the 7 billion dollar number yestday too but Variety is about as official as you can get. $59 a share might end up close to 7 billion though. Not sure.

[Jennifer2003]

Here's the link to the CNN article. I heard the news on CNN a few hours ago.

http://money.cnn.com/2006/01/24/news...ex.htm?cnn=yes

I think it's a good thing. I like John Lasseter!

I'm glad this came to a resolution.

Jennifer

[mickeyfans]

As a long-time fan of both Apple's and Disney's products, this deal is intriguing. Apple always seems to be steps ahead of its competitors in innovation, even though its market share has been historically low. The user-friendliness of the Macintosh is now being seen in a different form via the iPod and iTunes. I always thought that EPCOT was what Apple is all about, whether at Innoventions or perhaps its own pavilion. Both Apple and Disney have always placed the highest emphasis on customer service--this is what keeps us returning for vacations, and what keeps us buying the Macintosh. Even though the deal was with Pixar rather than with Apple, it should be interesting to see the impact.