Infoseek jumps on talk of buyout by Disney
By Bloomberg News
news.com
Special to CNET News.com
June 15, 1999, 12:35 p.m. PT
SUNNYVALE, California--Shares of Infoseek rose as much as 19 percent on speculation that an agreement is imminent for Walt Disney to buy the remainder of the company.
Infoseek rose 5.25 to 43.5 in midafternoon trading of 2.3 million shares. Earlier, the stock touched 45.56. Disney rose 0.38 to 29.38.
Disney said in a filing last week that it may buy the 57 percent of Infoseek that it doesn't already own in exchange for a new class of Disney stock Quote Snapshot
June 15, 1999, 1:00 p.m. PT
Infoseek Corp. SEEK
44.5000 +6.2500 +16.34%
Disney (Walt) DIS
29.2500 +0.2500 +0.86%
by symbol by name
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that would track the performance of Infoseek and Disney's combined Internet operations. Infoseek executives canceled an appearance at a Bear Stearns technology conference today, analysts said, fueling speculation that they're in talks with the world's second-largest entertainment company on an agreement.
"There is a growing view out there that it will happen sooner rather than later," said Bruce Smith, a Jeffries & Company analyst who has a "buy" rating on Infoseek.
Disney could offer as much as $70 a share for the remainder of Infoseek, Smith said.
Disney bought 43 percent of Infoseek last year, and the two companies later introduced their Go Network of Web sites, which competes with the likes of Yahoo.
The acquisition would give Disney greater control in guiding Infoseek's expansion. Disney stock has declined about 21 percent in the past year as it struggles with slow growth and declines in its home-video and consumer-products operations.
Disney spokeswoman Claudia Peters declined to comment, and Infoseek executives could not immediately be reached for comment.
Combining Web sites such as Disney Blast, a subscription service, and Disney.com with Infoseek would enable Disney to create the separate Internet tracking stock to take advantage of strong investor demand for such shares, analysts said.
"One of the biggest issues Disney has right now is retaining talent," Smith said. "They can't incentivize a lot of Internet executives with Disney stock. They need an Internet currency to do that."
Infoseek and Burbank, California-based Disney jointly own Web sites such as ESPN.com, ABCNews.com, and Infoseek.com. Disney also owns several sites for its entertainment brands and its ABC network.
Copyright 1999, Bloomberg L.P. All Rights Reserved.
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