Midway to Main Street | Roy Disney Considered Buying Disney & Selling the Parks @MidwaytoMainStreet | Uploaded December 2017 | Updated October 2024, 1 day ago.
Did you know that at one point in 1984, Roy E. Disney was considering a takeover of the Disney company that included selling off some of the theme parks? In early 1984 Disney was facing a potential hostile takeover by by a corporate raider, and of the many options considered by both Disney and Roy, one of them included Roy buying the company himself and selling parts of it off.
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This is Saul P. Steinberg. He was a corporate raider. What he and many other raiders in the 1980s did was sell junk bonds from their companies. They were essentially loans that had a high risk of defaulting, but a high interest rate. Theyâd use these junk bonds to raise money in the short term, and then use that money to buyout other companies. Then they would use the profits of the newly owned company to pay off those loans.
Disney at that time made for a really appealing target. It was a company with a lot of value in its properties and assets, including three theme parks and a beloved film library that spanned nearly 50 years.
When Disney learned that Steinbergâs company, Reliance Insurance, was buying up their stock, they had to act fast and figure out what to do. While they didnât know what would work and what would backfire, the options Disney had were numerous. One option included offering to buy back the Disney stock from Steinberg at a higher price. This practice was called greenmail, and it was less than ideal because paying greenmail usually meant another raider would come right around the corner to do the same thing.
Another option would be to, as odd as it sounds, buy another company. Spending a considerable amount of money on an acquisition of their own would not only saddle them with debt, but it would dilute the value of Disneyâs stock as well. In general, it would make Disney a less appealing target. The problem there was⊠well, itâd saddle them with debt and dilute their stock.
There was a third option, and that was to take the public company private again by buying it. Disney management consider this as well, but as they did, someone else was considering it.
Roy E Disney at this point was no longer a part of the Disney Company. He had resigned from his position years prior. Roy felt that the company wasnât evolving creatively anymore, and instead opted to just sit on the Disney board. Later, in March of 1984 Roy would resign from that position as well.
Shamrock hired an independent company to conduct a study on Disney to find out how much it was worth, and how much it would cost to buy. What they found was that it would cost Roy over $2 billion to buy Walt Disney Productions. He would essentially have to borrow the money from outside investors, use it to buy the company, and then turn around and sell parts of the company to pay back that loan.
To him it was a simple choice. If he had to sell off a part of the company it would be the theme parks. Growing up with his Uncle Waltâs movies and working in animation and film himself, he saw Disney as a film studio first and foremost. It wasnât ideal that he would have to sell part of the company, but he felt all things considered, heâd rather save part of the company than none of it. So he went ahead and started to have investors lined up for the massive loan he would need to take over Disney.
With all of the planning coming together, Roy would later learn that he would need to put $200 million of his own money up to buy Walt Disney Productions and he would have to sell one of the two resorts to pay back the loan of over $2 billion. In theory he was ready to carve out a piece of the company to save the rest, but when the time came he couldnât bring himself to do it. He couldnât cannibalize what his family worked so hard to build. Ultimately Shamrock Holdings would pass on the decision.
So what did happen? Well long story short, Disneyâs board ultimately decided to pay greenmail to Steinberg in return for the 4.2 million shares he owned. The greenmail would cost Disney over $325 million and it was approved under the condition that Disney would make moves to improve their overall value to prevent other raiders from trying to extort greenmail from them later down the line.
Roy was asked back onto the board of directors and helped kick off a drastic shift in leadership. They would also back his fight to have CEO Ron Miller ousted and replaced with new management. Under his suggestion and their support, the board approved the hiring of Frank Wells as President of the company and Michael Eisner as Chairman and CEO.
Did you know that at one point in 1984, Roy E. Disney was considering a takeover of the Disney company that included selling off some of the theme parks? In early 1984 Disney was facing a potential hostile takeover by by a corporate raider, and of the many options considered by both Disney and Roy, one of them included Roy buying the company himself and selling parts of it off.
Check out STORMING THE MAGIC KINGDOM by John Taylor
đamzn.to/2AfHsTu
New here? Be sure to subscribe!
đ·goo.gl/x17zTL
My Patreon!
â€patreon.com/RobPlays
My Disney Podcast!
đ§ttapodcast.com
Follow me on Twitter!
đ±Twitter.com/RobPlays
This is Saul P. Steinberg. He was a corporate raider. What he and many other raiders in the 1980s did was sell junk bonds from their companies. They were essentially loans that had a high risk of defaulting, but a high interest rate. Theyâd use these junk bonds to raise money in the short term, and then use that money to buyout other companies. Then they would use the profits of the newly owned company to pay off those loans.
Disney at that time made for a really appealing target. It was a company with a lot of value in its properties and assets, including three theme parks and a beloved film library that spanned nearly 50 years.
When Disney learned that Steinbergâs company, Reliance Insurance, was buying up their stock, they had to act fast and figure out what to do. While they didnât know what would work and what would backfire, the options Disney had were numerous. One option included offering to buy back the Disney stock from Steinberg at a higher price. This practice was called greenmail, and it was less than ideal because paying greenmail usually meant another raider would come right around the corner to do the same thing.
Another option would be to, as odd as it sounds, buy another company. Spending a considerable amount of money on an acquisition of their own would not only saddle them with debt, but it would dilute the value of Disneyâs stock as well. In general, it would make Disney a less appealing target. The problem there was⊠well, itâd saddle them with debt and dilute their stock.
There was a third option, and that was to take the public company private again by buying it. Disney management consider this as well, but as they did, someone else was considering it.
Roy E Disney at this point was no longer a part of the Disney Company. He had resigned from his position years prior. Roy felt that the company wasnât evolving creatively anymore, and instead opted to just sit on the Disney board. Later, in March of 1984 Roy would resign from that position as well.
Shamrock hired an independent company to conduct a study on Disney to find out how much it was worth, and how much it would cost to buy. What they found was that it would cost Roy over $2 billion to buy Walt Disney Productions. He would essentially have to borrow the money from outside investors, use it to buy the company, and then turn around and sell parts of the company to pay back that loan.
To him it was a simple choice. If he had to sell off a part of the company it would be the theme parks. Growing up with his Uncle Waltâs movies and working in animation and film himself, he saw Disney as a film studio first and foremost. It wasnât ideal that he would have to sell part of the company, but he felt all things considered, heâd rather save part of the company than none of it. So he went ahead and started to have investors lined up for the massive loan he would need to take over Disney.
With all of the planning coming together, Roy would later learn that he would need to put $200 million of his own money up to buy Walt Disney Productions and he would have to sell one of the two resorts to pay back the loan of over $2 billion. In theory he was ready to carve out a piece of the company to save the rest, but when the time came he couldnât bring himself to do it. He couldnât cannibalize what his family worked so hard to build. Ultimately Shamrock Holdings would pass on the decision.
So what did happen? Well long story short, Disneyâs board ultimately decided to pay greenmail to Steinberg in return for the 4.2 million shares he owned. The greenmail would cost Disney over $325 million and it was approved under the condition that Disney would make moves to improve their overall value to prevent other raiders from trying to extort greenmail from them later down the line.
Roy was asked back onto the board of directors and helped kick off a drastic shift in leadership. They would also back his fight to have CEO Ron Miller ousted and replaced with new management. Under his suggestion and their support, the board approved the hiring of Frank Wells as President of the company and Michael Eisner as Chairman and CEO.
