Disney May Issue $7.5 Billion in Securities

Walt Disney Co. on Friday notified the Securities and Exchange Commission that it may issue up to $7.5 billion in securities.

Analysts said Disney is expected to use the bulk of the proceeds from the sale of various securities to lower its debt on the acquisition of Fox Family Worldwide.

Disney last month announced its acquisition of Fox Family Worldwide from News Corp. and television entrepreneur Haim Saban for $3 billion in cash, plus the assumption of $2.3 billion in debt. The deal includes the Fox Family Channel. Disney spokeswoman Chris Castro said the registration was for “general corporate finance purposes” and would not elaborate. The stock sale also would allow Disney to raise cash for small-scale acquisitions, possibly of cable and television stations, said Spencer Wang, an analyst with ABN Amro.

Wall Street analysts have speculated that among Disney’s acquisition targets is E.W. Scripps Co. because the two companies have compatible cable and television groups.

Disney has been under pressure from some investors and analysts to expand its distribution pipeline to better compete with rivals such as AOL Time Warner Inc.

The stock proceeds, however, would not be large enough to make a major deal, such as an investment in AT&T;’s cable business, analysts said.

Disney and AT&T; officials have had discussions about such an investment.

The company made a similar filing for $5 billion in 1998. The filing allows Disney to sell any combination of debt securities, preferred and common stock and warrants. Companies register stocks and bonds in advance in order to sell them quickly when they need the cash.

Disney stock closed Monday at $25.90, up 25 cents, on the New York Stock Exchange.