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» AnimationNation   » General Discussion   » Disney to buy Pixar?!!

   
Author Topic: Disney to buy Pixar?!!
Nickolas
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January 19, 2006
6:45 a.m. EST
wsj.com

The Wall Street Journal reports that Disney in serious talks to buy Pixar after months during which the animation giants have explored ways to continue their lucrative partnership. The deal would make Pixar CEO Steve Jobs the largest individual shareholder in Disney.

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Mr. Fun
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While working on "Toy Story2" up at Pixar in early 1998, Steve Jobs sent out an email saying he would never return to Apple Computer. As you know, a few months later Steve became interim CEO of Apple.

I'm waiting for my email telling me this deal will never happen.

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slapmagic
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i don't really know how to feel about this one. I don't want disney to control pixar, but having Steve Jobs as the most influential stockholder at Disney does seem appealing. He seems to understand the concept of quality over quantity.

Is Steve joining the dark side? Is Roy pulling these strings?

Interesting stuff.

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Ganklin
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personally, i tink its a cheap move...well not monetarily for jobs anyway. i'm sure he's getting a very lucrative deal not to mention that distribution deal for disney content on itunes which is where i think his real agenda is. the sticking point for me is that now there is once again the breaking down of competition in the industry for feature quality films. not that i don't think a healthy buiseness relationship should exist between the two studios, but it just seems like a monopoly to me.

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Mr. Fun
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I've been watching this thing play out over the last few months. I've been on the fence, but now I think it might actually happen.

If the right deal can be struck, Steve Jobs will assume a power position on Disney's board of directors and John Lasseter will be the new head honcho over all Disney animated productions both digital and traditional. (Who said Pixar would never make a traditional film?)

That's how things are currently shaping up. Some people are not too happy with this situation, but look at the bright side. This could be the best for both companies.

To infinity and beyond!

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Ganklin
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i like disney films. i also like pixar films, but i see them as something else and different. i would hate to see that dissappear.

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pud
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go buy that Disney stock....

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old_blue
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This Business Week article actually states the opposite.

Sure, it could happen. Talks between Disney and Jobs's other company, Pixar Animation Studios (PIXR ), have been dragging on for months, and at least one iteration of the deal has Disney buying some or all of Pixar and making Jobs Disney's largest shareholder. From there, he could get a board seat and potentially be put at the head of the table.

Don't bet on it. Buying Pixar would cost Disney a bundle, maybe $8 billion or $9 billion and could send Disney's stock into a tailspin. When the rumor first surfaced on Jan. 4, the share price promptly dropped 1.5% in the 45 minutes before the market closed that day. A deal of that size would be a huge drag on Disney's earnings, figures Merrill Lynch analyst Jessica Reif Cohen, who projects the deal would dilute 2006 profits by 10% if it were struck at $60 a share, or by 13% at $70 a share. (Pixar traded at $56.28 in morning trading on Jan. 13.)

http://yahoo.businessweek.com/bwdaily/dnflash/jan2006/nf20060117_1937_db035.htm

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pud
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go sell that Disney stock....

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Mr. Fun
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Is this part of Save Disney?

Hmmm, maybe this was all part of Roy's plan after all.

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Eric Hedman
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I love you Pud! bwah hahahaha!!!

Oh, and BobV is a genius. [Smile]

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Charles
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Eyes on the prize, guys. It was all about getting rid of Eisner. Something will be worked out. It's in the best interests of both parties.

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hamsterbite
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I can't help but feel it would be more like Pixar taking over Disney if this is true, which would be fantastic.
Traditional animation would be respected there again, the parks would no longer have so much chipped paint, and maybe the Florida studio would even reopen eventually. (Gosh, maybe they'd even replant the live-oaks they bulldozed in front of the castle.)

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Semaj
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Let's just hope that this isn't a cop-out on Disney's part so they can use Pixar as a substitute when things get rough in their own studio.
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Tobias A. Wolf
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Just my initial reaction, and it's cynical; but if Steven Jobs wants to sell Pixar, the movie business is in more trouble than I ever thought it was. And it's probably contracting stronger than any of us know.

I'm sure there's a lot more to it, but that's what I get out of the story. Bottom line.

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Charles
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This reminds me of Neo in "The Matrix". The scene at the end where he comes back to life, takes control and absorbs himself into agent Smith, then explodes from the inside out standing at last in triumph.

Here's an article that appeared today on MSN.com

http://moneycentral.msn.com/content/P142511.asp


Street Patrol
Why Disney needs Steve Jobs and Pixar

By buying Pixar, Disney could restore magic to its moribund animation studio and put the country's hottest CEO on its board.

By Robert Walberg

If you can’t beat 'em, buy 'em.

Okay, so it doesn’t have the same charm as, “When you wish upon a star,” but if you are Walt Disney (DIS, news, msgs) and you haven’t produced a hit animated movie in years, then it’s time to stop wishing and start acting. Acquiring Pixar (PIXR, news, msgs) would be a very bold act indeed.

According to The Wall Street Journal, Disney is in serious discussions with Pixar about a potential buyout in the neighborhood of $7.0 billion. That’s a very nice neighborhood -- especially if you are Steve Jobs, Pixar’s CEO and majority shareholder. If the price paid for Pixar is even close to the reported figure, Jobs will be cashing in on Pixar’s string of successful movies to the tune of about $3.5 billion.

But enough about Jobs, for now. Let’s take a look at Disney's motives and try to determine if the entertainment giant is making a good decision or a rash one. While Disney derived nearly half of its fiscal-year 2005 revenue of $31.9 billion from its media networks and consumer products divisions, the company remains best known for its theme parks and its movies -- especially its animated movies.

Animation stagnation
There's the problem. Disney animation hasn’t turned out a major hit since Tarzan in 1999. Frankly, its concepts and technology are dated, and with increasing competition from Pixar and DreamWorks Animation SKG (DWA, news, msgs) the company is struggling to produce films that resonate with today’s audience.

So if you are an entertainment company founded on the strength of your animation and you haven’t produced an animated hit in years, it’s time to consider some new options. With Disney and Pixar having enjoyed a successful and longstanding distribution partnership, it's no surprise that buying Pixar was option No. 1.

But the single best reason for Disney to buy Pixar is that the latter is the king of today’s animated film world. Since releasing "Toy Story" a decade ago, Pixar has created one mega-hit after another. Its titles include, "A Bug’s Life," "Monster’s Inc.," "Toy Story 2," "Finding Nemo" and "The Incredibles." The company hasn’t missed yet, and if previews of this summer’s "Cars" are any indication, the string will remain intact.

Of course, the question for investors is if Pixar agrees to be bought by Disney, will its creative energy be stifled or altered. Disney tried to pressure Pixar into adding musical numbers to Toy Story years ago, to make the movie more Disney-like. Pixar refused to compromise its vision then, but will it be able to do so if it actually becomes a part of Disney?

Disney's management would be smart to stand back and let Pixar's creative teams crank out the hits. Unfortunately, big companies often want to tell the smaller companies they acquire how to do things. If Disney thinks it knows animation better than Pixar, its executives might want to try sitting through the poorly reviewed "Chicken Little," and think again.

A board seat for Mr. Incredible
There are two more reasons why it makes sense for Disney to buy Pixar. First, it will be able to continue merchandising all the characters. Having just returned from a week in Disneyland with my family over the holidays, I can tell you firsthand how excited my kids were to meet the characters from "Monsters Inc." and "The Incredibles." They also loved the Buzz Lightyear ride.

Developing the merchandise around the Pixar characters for years to come and turning them into this generations Mickey and Donald could generate big profits for years to come. Nobody does animation better today than Pixar, and nobody has done better over the years at merchandising than Disney. From that standpoint, it’s a marriage made in heaven.

Also heavenly, at least from a Disney shareholder perspective, is the possibility of having Steve Jobs as a top shareholder and active board member. Combine his success at Pixar with his stunning turnaround of Apple (AAPL, news, msgs), and there isn’t a hotter CEO in the country. Certainly, no CEO has done done a better job of visualizing and then realizing how technology would transform entertainment.

Adding the stature of a Steve Jobs to the board of Disney is almost worth the purchase price alone. Now, about that purchase price. At roughly 20 times sales, Pixar isn’t a bargain. But when you consider that Disney sits on about $1.7 billion in cash and that it generated $2.4 billion in free cash flow last year, the question isn’t whether Disney can afford to buy Pixar, but whether it can afford not to.

The Walt Disney Co. remains a Street Patrol portfolio holding.

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Doodles
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I think Amid over on Cartoon Brew has postulated a scenario that's hard to ignore.

What if this is an intermediate step in an overall process? Disney "buys" Pixar, but now has Jobs as the largest single shareholder. (And you can bet your bippy Catmull and Lassiter would also have decent-sized chunks.)

After a few months settling-in period, Jobs turns around with a new proposal for the combined board:

"Gentlemen, since you are all so fond of synergy, and have long been trying to get involved in digital distribution of media, how would you like to become affilliated with a company that has taken music and media distribution to the masses in ways that had never been dreamed of before?"

And that's when Apple takes over Disney. [Eek!]

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OFFBEAT
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Supposedly it's official. Disney now owns Pixar.

I'd post a link to a news source.. but I found out before they did, I guess.

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OFFBEAT
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$7 Billion. BILLION! With a 'B'!!!

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BobV
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Here's a link:

http://news.portalit.net/fullnews_Disney-buys-Pixar,-Steve-jobs-becomes-major-shareholder! _1072.html


It's dated tomorrow, so it must be true!!

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Charles
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Here's the text from the link BobV provided above.
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Disney buys Pixar, Steve jobs becomes major shareholder!

Disney will acquire tomorrow Pixar Studios for $7bn. Pixar's CEO, Steve Jobs will thus become the largest shareholder in Disney.

Pixar Animation Studios is one of the most impressive animation studios in the last decade.

Its success might be the salvation of Disney, which struggled to release original and financially successful productions, but did manage only to release sequels of earlier successful works.

Disney will not quit traditional animation, as well as Pixar will not quit its state of the art digital technology designs. Steve Jobs, which is also the CEO of Apple Computer will most likely run the new company, as major shareholder will certainly have the decision at Disney.

There is speculation that, following the deal, there will be more Disney content available for download on iTunes!

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Captain 3D
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hmm dont think so. This sounds very much like the report yesterday here...

http://applexnet.com/index.php?name=News&file=article&sid=1712

I think everyone is still guessing or just jumping the gun

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Eric Hedman
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Buh-Hillion with a "Buh". [Smile]

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Kion
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I am liking this

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