Walt Disney
Walt Disney Case
In 1984, Disney was faced with an attempt of a takeover by Saul Steinberg. Ron Miller, the current CEO and president of the company, sought to halt this action and came up with a decision. Miller wanted to decide whether or not to let the takeover happen or to repurchase Steinberg’s stock. If the repurchase was to occur, Miller had to present to the shareholders at what price to make the repurchase. Miller should repurchase Steinberg’s shares to prevent the takeover and continue the legacy of Walt Disney. In the details provided below, we will further discuss the details as to why Miller should repurchase the stock and at what price. Starting as just an in-home studio film business by Walt Disney himself, along with his brother Roy; Walt Disney has become known as one of the most prominent Entertainment corporations in the world. Like any other company that has dominated its industry, Disney has been challenged with some issues of their own that has been a major concern for the future of the company. Disney has four different components of their company which consisted of real estate development, consumer products, theme parks, and film. Steinberg saw a decrease in the film segment of the company, which decreased total revenues and weakened the stock price. There were also a considerable amount of decreases in the theme park attendance, domestic and foreign theatrical features, and the publications and educational media consumer products. These trending activities may have signaled Steinberg of possible internal managerial and structural problems existing within the company. In turn, the stockholders had always experienced a healthy return on equity until 1982 where it dropped to 7.85 due to the failure of EPCOT. Low debt, substantial asset holding, and reduced cash flow also reduced the return on equity for stockholders during that time. Of the 34.5 M shares outstanding, Saul is currently in possession of (#shares) and in
In 1984, Disney was faced with an attempt of a takeover by Saul Steinberg. Ron Miller, the current CEO and president of the company, sought to halt this action and came up with a decision. Miller wanted to decide whether or not to let the takeover happen or to repurchase Steinberg’s stock. If the repurchase was to occur, Miller had to present to the shareholders at what price to make the repurchase. Miller should repurchase Steinberg’s shares to prevent the takeover and continue the legacy of Walt Disney. In the details provided below, we will further discuss the details as to why Miller should repurchase the stock and at what price. Starting as just an in-home studio film business by Walt Disney himself, along with his brother Roy; Walt Disney has become known as one of the most prominent Entertainment corporations in the world. Like any other company that has dominated its industry, Disney has been challenged with some issues of their own that has been a major concern for the future of the company. Disney has four different components of their company which consisted of real estate development, consumer products, theme parks, and film. Steinberg saw a decrease in the film segment of the company, which decreased total revenues and weakened the stock price. There were also a considerable amount of decreases in the theme park attendance, domestic and foreign theatrical features, and the publications and educational media consumer products. These trending activities may have signaled Steinberg of possible internal managerial and structural problems existing within the company. In turn, the stockholders had always experienced a healthy return on equity until 1982 where it dropped to 7.85 due to the failure of EPCOT. Low debt, substantial asset holding, and reduced cash flow also reduced the return on equity for stockholders during that time. Of the 34.5 M shares outstanding, Saul is currently in possession of (#shares) and in