Wall Street Advisors at Center of Struggle

Comcast Corp. and Walt Disney Co. are waging a very public jousting match, but the outcome could rest in part on the behind-the-scenes maneuvering of the Wall Street investment bankers who are plotting strategy for the two companies.

Befitting an epic corporate struggle, Comcast and Disney have assembled teams of marquee bankers and lawyers who have played central roles in reshaping the entertainment and cable industries over the last decade.

“The Disney-Comcast situation has more outstanding investment bankers than most large deals in the recent past,” said Stephen Fraidin, a top merger lawyer and partner at Kirkland & Ellis in New York who isn’t working for either team.

“For the lawyers and investment bankers not involved,” Fraidin added, “there’s a pretty good dose of envy.”

No wonder: The Disney deal promises a rich payday. It could yield more than $100 million in fees, with each side taking home $50 million to $60 million, according to Dealogic, a New York research firm.

Only five deals worldwide have topped the $100-million fee mark since 2002. After such a long drought of blockbuster mergers and acquisitions, Comcast’s bid for Disney has riveted Wall Street.

“The Comcast initiative has crystallized various management teams to say, ‘If those assets really get put into play, then maybe we need to think more about who we should team up with to go after those assets or [to] approach Disney as a friendly partner,’ ” said Jeff Amling, head of media investment banking at Deutsche Bank in New York.

Some bankers are trying to figure out how to latch onto the Comcast offer, perhaps by promising financing if the cable giant eventually adds a cash component to its all-stock deal.

Investment bankers play crucial roles in all aspects of a merger or acquisition and can help to make or break a deal.

For would-be acquirers, bankers structure the deal financially and help pitch it to shareholders. And if the deal turns hostile, the bankers must fashion a strategy to make the other company capitulate.

Comcast’s bid for Disney is considered unsolicited, not hostile, because Comcast hasn’t taken any steps to undermine Disney’s management, such as soliciting Disney shareholders.

Hostile or not, bankers for the target company try to fend off any unwanted advance. And if management decides to accept a takeover deal, bankers make sure the price is fair to shareholders.

Comcast has largely reassembled the advisory team it used to gobble up AT&T; Broadband in 2002.

The company is being advised by Felix Rohatyn, a legendary Wall Street banker, and Steven Rattner, another Wall Street veteran who is a longtime friend of Brian L. Roberts, Comcast’s chief executive.

Also leading the Comcast team are Paul Taubman, the co-head of mergers and acquisitions at Morgan Stanley, and Robert Kindler, the global head of M&A; at J.P. Morgan Chase & Co. Taubman, who once worked for Rattner, has been a key Comcast advisor, and Kindler is a former top mergers and acquisitions lawyer at Cravath Swaine & Moore in New York.

Comcast’s outside legal counsel is Dennis Hersch, who heads the M&A; practice at Davis Polk & Wardwell and has worked on numerous Comcast deals.

All but Rohatyn, a former Comcast board member, advised on the AT&T; Broadband deal. The team has some built-in advantages, some experts said, including the company’s reputation for strong management and successful integration of past mergers.

“While Comcast has the A-team of advisors, what really matters is they have the far better hand,” said Michael Price, senior managing director of Evercore Partners, an investment banking boutique in New York.

Disney is being advised by two investment banks, Goldman Sachs Group Inc. and Bear Stearns Cos. Dewey Ballantine is the outside legal counsel.

Gene Sykes and Andy Gordon head the Goldman Sachs team, and Alan Schwartz leads the Bear Stearns team. Sykes has been a key player in several big media and technology deals. Schwartz, who is president and co-chief operating officer of Bear Stearns, has built his company’s merger practice significantly. He helped Disney buy Capital Cities/ABC Inc.

The Dewey Ballantine squad is quarterbacked by Morton Pierce, chairman of the firm’s mergers practice

Also advising Disney is Martin Lipton, famed creator of the “poison pill” takeover defense -- a strategy that tries to prevent one company from taking over another, often by making the deal prohibitively expensive.

For Rohatyn and Rattner, the Comcast bid marks a high-profile reunion of sorts. The two men once worked closely at Lazard Freres, a Wall Street investment bank, before having a public falling-out that some attributed to clashing egos. Rattner was viewed as Rohatyn’s protege until their spat broke into the open in a 1996 New York magazine article in which Rohatyn was quoted as saying Rattner was “monomaniacal.”

Rohatyn was traveling last week and couldn’t be reached for comment. Rattner said he and Rohatyn had patched up their differences and had worked together in recent years.

“The past issues are deep in the past,” Rattner said

Rohatyn, who runs his own small firm, Rohatyn Associates, played a key role in Cingular Wireless’ recent snagging of AT&T; Wireless Services Inc. from rival Vodafone Group. He is taking a less hands-on role in the Comcast deal.