Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Pixar Animation -- Ignore unavailable to you. Want to Upgrade?

To: mopgcw who wrote (3243)	1/24/2006 6:38:17 AM
From: Glenn Petersen	Read Replies (1) \| Respond to of 3261

Disney Bid for Pixar Is Imminent January 24, 2006 By LAURA M. HOLSON and ANDREW ROSS SORKIN LOS ANGELES, Jan. 23 - 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 said Monday night. Disney's board voted to give the chief executive, Robert A. Iger, the authority to offer the chief executive of Pixar, Steven P. 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, these people said. A Disney spokeswoman declined to comment; calls to Pixar were not returned. 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." Several crucial details were still being hammered out Monday, including the employment contracts for certain Pixar executives, among them John Lasseter, Pixar's chief creative officer and a former animator at Disney, one person said. He is expected to oversee the animation unit that would become part of Disney's filmed animation division. The deal would combine Pixar with Disney's animation unit and give Mr. Jobs a seat on Disney's board. Two years ago Disney and Pixar began renegotiating a distribution agreement that would have given Disney the right to distribute Pixar's films after the release of the forthcoming "Cars." (The two jointly produce Pixar movies although Disney owns the rights. The agreement ends after "Cars.") At that time, as with these talks, price was an issue. In 2004, Mr. Jobs was demanding that Disney share rights to the movies that Pixar had yet to make, including "The Incredibles," which was released in 2005, as well as "Cars." But Disney, which owned all of the rights to these movies, did not want to give them up. Pixar, based in Emeryville, Calif., has grown to hundreds of employees from about 44 in 1986, two years after Mr. Jobs acquired the company from the director George Lucas for $10 million. Pixar and DreamWorks Animation have led the way in computer animation for films. Last year, talks about renewing the distribution deal with Pixar arose again after Mr. Iger was named chief executive of Disney. Mr. Iger began thinking about the acquisition last fall when it became clear to him that distribution alone would not add much value to Disney over all, said a person who discussed the matter with the Disney chief. Disney's own animation unit lagged behind its peers, and Mr. Iger made it a priority to improve its operation. Animation is essential to Disney's success because it provides the characters that drive the company's theme parks, consumer products and cable television programs. In recent years, Pixar has become a steady supplier of such characters. Laura M. Holson reported from Los Angeles for this article and Andrew Ross Sorkin from New York. nytimes.com

To: mopgcw who wrote (3243)	1/24/2006 10:33:51 AM
From: inaflash	Read Replies (1) \| Respond to of 3261

I don't claim that the deal isn't good for Disney. All the reasons stated, execept the last are all reasons why Disney should buy Pixar. If I were a Disney stock holder, I'd say full steam ahead, might even say pay more! But as a Pixar stockholder, aside from the perception that the numbers are "greatly inflated", there's not as compelling argument. Yes, Disney is a great name, but look back at the last decade. Without Pixar, they would be beat by Dreamscape! Pixar had to make a terrible deal initially to first prove itself with Disney, then they re-negotiated a 5 film deal, but got screwed by Eisner (i.e. Toy Story 2 didn't count, so why produce Toy Story 3?). The don't own any of their film or character rights (Disney does). They may have limited video and rerun rights, if I recall correctly, but split with Disney. They don't have any merchendising licensing revenue (toys, cartoons, McDonalds, etc). Going forward alone, they would have many more sources of revenue, and their value reflects that expectation. If you were to calculate how much Disney has made off Pixar, you'd find that Pixar is worth more than $6-7 Billion. So, together they'd certainly be a great, but it's Disney that needs this deal going forward. All Pixar stockholders get is a little cash early with the security that it doesn't go down, but they give up future potential in the company (no owning Disney isn't the same). As a stand alone company, Pixar can be the next Disney in animation. There was a recent writeup that Jobs is not the best timer for stock value. He traded in some hundres of million of options 2003 that appeared to be worthless that today would be worth $3.5 billion. He got in exchange fewer options in the money that are worth about $800 million today. Let's hope it's not that kind of unlucky timing that's in store for Pixar stockholders right now. Well, it is Jobs company, and it's convincing him what it's worth and what it's in it for him. Let's hope he's got part of his eye on what's best for stockholders given that he's one, but there are outside considerations. Anyway, his interest in Disney can help his other company, which I do have an investment in. If the deal does go thru, as it's looking to do, Disney stockholders should be very happy. Well, I guess being in the "Happiest Place On Earth"(tm) can't be that bad for all the Pixar folks.