Disney board okays takeover offer to Pixar: source
Tue Jan 24, 11:45 AM ET
LOS ANGELES (Reuters) - The board of Walt Disney Co. has authorized Chief Executive Robert Iger to make an offer to buy Pixar Animation Studios Inc., and that is expected by Tuesday, a source familiar with the matter said late on Monday.
Pixar's board is expected to consider the offer on Tuesday as well, said the source, who did not disclose financial terms.
The Pixar board was expected to confer by telephone, the source said.
In the event a decision is reached, an announcement by Disney would be expected after the market closes, the source said.
Pixar shares closed at $58.27 on Monday on Nasdaq, putting its market value at just under $7 billion. The shares have risen about 12 percent in the last month, partly on speculation that Disney would buy the computer animation company that created such hits as "Toy Story," "Finding Nemo" and "The Incredibles."
Shares of Disney were up nearly 2 percent, or 48 cents, at $26.01 in morning trade on the
New York Stock Exchange. Pixar shares were down 8 cents at $58.19 on Nasdaq.
The Wall Street Journal has reported that Disney is considering an all-stock offer, which would make Pixar Chief Executive
Steve Jobs the company's largest individual shareholder.
The Journal reported late on Monday that the offer under consideration would give Jobs, who has a controlling stake in Pixar, a seat on the Disney board.
Disney, for decades the world leader in hand-drawn animated films such as "Pinocchio" and "Lion King," has struggled in recent years to maintain its position in an industry that has embraced computer-generated films.
Although Disney has not produced a blockbuster animated film on its own in years, the six films Pixar and Disney made since the 1995 release of "Toy Story" have grossed more than $3.2 billion.
Jobs had feuded publicly with Iger's predecessor, Michael Eisner, and broke off negotiations for a new distribution agreement with Disney about two years ago.
Iger, who succeeded Eisner as Disney's CEO in October, made a priority of smoothing over relations with Jobs and was in the midst of renegotiating the distribution pact, which expires in June with the release of "Cars," when takeover rumors surfaced.
Jobs, who is also chief executive of Apple Computer Inc., has already led a revolution in digital delivery of content by providing legal downloads of music through Apple's iTunes Music Store and by striking a deal with Iger and Disney to offer video downloads of ABC television shows.
A deal that would give Jobs a Disney board seat could also put him in a position to lead Hollywood's move onto the Web.
The Disney board may also approve a buyer for the company's ABC Radio assets, worth an estimated $2.6 billion to $2.9 billion, from among several bidders.
Sources familiar with the radio transaction said on Friday that Disney was within a week or two of deciding on a buyer.
