Roy Disney Agrees to Sell 7.5M Shares

AberdeenNews.com ^ | 8/20/2003 | GARY GENTILE

[ConfusedAndLovingIt]

LOS ANGELES - Walt Disney Co. Vice Chairman Roy E. Disney has agreed to a future sale of 7.5 million Disney shares, a transaction that is netting the son of company co-founder Roy O. Disney $125 million.

Disney, through a family trust he established, agreed to a "variable prepaid forward" contract with investment firm Credit Suisse First Boston, Disney said Wednesday.

Disney, 73, said he sold the shares to cash in a portion of his holdings "to meet other investment objectives."

Under the terms of the agreement, CSFB paid Disney $21.751 per share, then resold the shares into the public market, according to a filing with the Securities and Exchange Commission.

The sale netted $163 million, but Disney received $125 million after a negotiated discount and fees.

Shares of the company have risen over the past few months to close at its 52-week high.

Disney has five years to deliver the shares. He also has the option of keeping the shares and settling the contract with cash.

The contract protects Disney if company shares fall below $21.75 within five years, and allows him to receive more for his shares if they rise in value to a limit of $32.63 per share.

Disney said he opted for such a contract instead of directly selling shares to show his "continued commitment to the inherent value in The Walt Disney Co."

He also retains his right to vote the shares during the term of the contract.

Disney sold the shares to diversify his investment portfolio, the company said in a statement, adding that such forward transactions have become increasingly common.

Before the transaction, Disney was the single largest reported shareholder, with 17.3 million shares. After the sale, Disney will retain about 10 million shares, making Disney's chairman and chief executive, Michael Eisner, the single largest reported shareholder with 13.9 million shares.

Shares of Disney fell 25 cents to $21.98 at the end of regular trading Wednesday on the New York Stock Exchange.

[ConfusedAndLovingIt]

Is this a a normal business transaction, or does Roy see the handwriting on the wall?

[sarasota]

Until they get rid of Eisner, it's hopeless.

[jjm2111]

Bump for later.

[God luvs America]

This is sad....Roy was the only one in that corporation that tried to keep the values of Walt alive. Now that liberal bastard Eisner will have fags, hags and commies running the joint. It angers me as a fan of Disney and a stockholder. Eisner will probably try and change the name of the parks from Walt Disney World to Mike Eisner Park!

To answer your question about the handwriting on the wall; about ten years ago Disney premiered the movie Pocohantas by giving a fee showing on the great lawn in Central
Park. Afterwards Eisner and Roy Disney were interviewed; you could see the disdain and total lack of respect Eisner had for Disney in the way he treated him and talked towards him.

A sad day for Disney fans.

[wardaddy]

I'd like to sell my shares under that arrangment.

[God luvs America]

fat chance!

[afraidfortherepublic]

In Walt's memory and honor, any relative should sell their shares and distance themselves from this company with the despicable values. This is no longer your "mothers" Disney.

[ConfusedAndLovingIt]

Before the transaction, Disney was the single largest reported shareholder, with 17.3 million shares. After the sale, Disney will retain about 10 million shares, making Disney's chairman and chief executive, Michael Eisner, the single largest reported shareholder with 13.9 million shares.

I forgot to point this out. Michael Eisner is now the largest shareholder.

[KellyAdmirer]

He has five years to tender the shares? And if they go higher, he can just sell them in the open market or otherwise and pay it off in cash?

My goodness, more like a stock option than a stock sale. The Disneys don't raise dummies.

[beelzepug]

"Eisner will probably try and change the name of the park..."

How about "Six Fags Over Florida"?