updated 2/17/2004 3:42:02 PM ET 2004-02-17T20:42:02

A day after its offer to buy The Walt Disney Co. was rejected as cheap, cable TV giant Comcast Corp. refused to budge on its unsolicited all-stock offer, saying it reflected a fair valuation of the iconic media company.

“Any time over the last three years, our proposal represents at least a 10 percent premium” to the shares’ market value, said D’Arcy Rudnay, a spokeswoman for Philadelphia-based Comcast.

“The proposal, we think, reflects a full and generous valuation ... and what’s key is Disney’s prospects and performance over a long period of time.”

In rebuffing Comcast on Monday, Burbank, Calif-based Disney noted that the offer to swap 0.78 of a share of Comcast for each Disney share — originally worth $54 billion — undervalued the company by about $6.6 billion based on last week’s stock prices.

Disney stock last week jumped from about $24 per share to more than $28 after Comcast made its offer — a swing of more than $8 billion.

Analysts said Comcast needs to discount the jump Disney’s stock price took last week and wait several weeks before making another offer. Disney and Comcast had combined 2003 revenues $45 billion; if the two companies agreed to merge, they would surpass Time Warner Inc., which had $39.6 billion in revenues last year.

“I think that they wait to ... see what happens with the Disney stock price, to see if it settles down to the pre-offer levels,” said Thomas Eagan, an analyst with Oppenheimer & Co.

Late Monday, Disney’s board rejected Comcast’s offer as too low, but left open the possibility it would sell for a higher price.

“In any proposal by Comcast, or any other company, the board will consider and assess the value to be received in exchange for the shares of Disney, and also the appropriate premium to reflect the full value of Disney.”

A person familiar with the Comcast offer, who spoke to The Associated Press on the condition of anonymity Tuesday, said the cable giant wasn’t interested in paying current market prices to acquire Disney, which owns ABC, ESPN, movie studios and theme parks.

Comcast has alternatives to raising its offer, Eagan said. Among them is a maneuver called a consent solicitation, where Comcast — with Disney shareholder approval — would try to replace members of Disney’s board of directors with candidates more open to the merger.

Eagan said that maneuver shouldn’t be tried unless Disney’s stock price comes down.
Comcast isn’t interested in a consent solicitation offer, said the source.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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