Eisner Expected Comcast’s Offer

Far from being blindsided by Comcast Corp.’s bid to buy Walt Disney Co., Chairman Michael Eisner said Monday that he had been warned of the cable giant’s intentions -- and was well prepared by the time the call came in.

Eisner said he’d heard rumblings about Comcast’s interest in Disney, told the company’s board about them and then crafted a written response with the help of three outside advisors well before Comcast Chief Executive Brian L. Roberts phoned him Feb. 9 to discuss a potential deal.

“There had been some direct, vague conversations that led us to believe that this phone call could happen,” Eisner said during a conference call with investors. “I happened to be sitting at my desk when Mr. Roberts called.” The Disney chief explained that he punched up the prepared response on his computer screen -- and delivered it to Roberts “word for word.”

Eisner’s recollection drew a sharp rebuke Monday.

“We find it extremely troubling that Disney’s board would have made up its mind to say no to our proposal before they even heard it” and knew what it was worth, a Comcast statement said. “How can that possibly be in the best interests of Disney’s shareholders?”

Others raised the same question.

“You at least owe your shareholders hearing the other side out,” said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware. “To make a decision based on a rumor doesn’t seem as though it gives the kind of thoughtful consideration shareholders expect.”

Sources close to Roberts said the Feb. 9 call began with the Comcast CEO asking Eisner whether the Disney executive could envision “any scenario” in which a deal could be reached. Eisner dismissed the idea, sources said. The call lasted about 30 seconds.

Comcast made a formal offer for Disney on Feb. 11. On Feb. 16, the Disney board said it was acting in the interest of shareholders when it “carefully evaluated and considered” and unanimously rejected the bid, valued at $48 billion based on Comcast’s closing stock price Monday.

George Mitchell, Disney’s presiding director, stressed Monday that Eisner had acted with the backing of the board when he rebuffed Roberts on the phone.

“Every member of the board was informed and aware of the fact that a phone call might be made, so that the call was not unexpected, and all members were aware of what, I guess, I will call ‘the interest,’ ” Mitchell said.

Eisner and Mitchell spoke during a conference call organized by Glass Lewis & Co., an independent research and proxy advisory firm. It was convened 10 days before Disney’s much-anticipated shareholder meeting in Philadelphia, one that has turned into a referendum on Eisner’s leadership.

Leading the charge against Eisner have been former Disney directors Roy E. Disney and Stanley P. Gold. They are calling on shareholders to withhold their votes for Eisner and three other board members, maintaining that the company has underperformed and made strategic missteps over the last decade.

During Monday’s conference call, several board members defended the company’s track record. Judith Estrin, for one, said that the media had created a false “perception of weakness” about the company. “There is a lot of innuendo out there that is being repeated that is not reality,” she said.

Estrin also defended recent pay raises for Eisner and Disney President Bob Iger, saying “they have done a really good job in managing the company” in a difficult economic environment.

For his part, Eisner noted that many of the things for which Disney management has been criticized were embraced by Gold and Roy Disney. He cited the $5.2-billion acquisition of Fox Family, now the struggling ABC Family Channel.

“Mr. Gold was a giant advocate of it,” Eisner said.

That prompted Roy Disney and Gold to respond in a statement: “Our votes as board members were based upon information and projections provided to us by management. In the case of ABC and the Family Channel, these projections never became reality.”

Gold and Disney continued their offensive against Eisner, issuing an urgent appeal to smaller investors to tell their brokerages how they wanted their shares voted. Typically, they said, brokerages vote for management unless directed otherwise by their clients.

“If you fail” to be proactive, Gold and Disney warned, “all of your Disney shares will be automatically voted ‘for’ ” Eisner.

In their statement, the two also complained that shareholders had not been given enough time to mail in their votes, contending that some had received their proxies late or not at all.

Disney spokesman John Spelich said proxies were mailed out Feb. 6, giving shareholders “ample time to return their ballots and ensure that their votes are counted.”

It was a good day for Eisner on Wall Street. Disney shares fell as low as $26.02, then surged in the final hour and closed up 20 cents at $26.75 on the New York Stock Exchange. Comcast, for its part, slid 67 cents to $29.51 on Nasdaq, the stock’s lowest closing price since Aug. 28. The value of Comcast’s bid now is $23.02 a Disney share, 14% below Disney’s closing price.

Disney also got a lift of a different sort Monday: It was announced that an upcoming issue of Fortune magazine had ranked Disney as America’s most admired entertainment company based on a survey of top industry executives, directors and securities analysts.

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Times staff writers Sallie Hofmeister and Tom Petruno contributed this report.