He added though that Pixar should add to earnings by fiscal 2008 and that Disney was still on track to post annual double-digit percentage gains in earnings through 2008.īut one hedge fund manager said that the risk of Disney losing Pixar was too great. To that end, Disney chief financial officer Thomas Staggs said during the conference call that the deal would reduce Disney's earnings slightly in fiscal 2006, which ends this September, as well as fiscal 2007. A source tells FORTUNE that some Disney board members also thought the price was too high. Prior to the deal's announcement, some Wall Street observers had speculated that Disney may be paying too much for Pixar. The stock has surged more than 10 percent so far this year on takeover speculation.ĭisney's stock gained 1.8 percent in regular trading on the New York Stock Exchange and was flat after-hours. Shares of Pixar ( Research) fell slightly in regular trading on the Nasdaq Tuesday but gained nearly 3 percent in after-hours trading. Based on Tuesday's closing prices, that values Pixar at $59.78 a share, about a 4 percent premium to Pixar's current stock price.
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Jobs added that after a "lot of soul searching," he came to the conclusion that it made the most sense for Pixar to align itself with Disney permanently instead of trying to distribute films on its own or sign with another movie studio partner.Īccording to the terms of the deal, Disney ( Research) will issue 2.3 shares for each Pixar share. "The addition of Pixar significantly enhances Disney animation, which is a critical creative engine for driving growth across our businesses," said Disney CEO Robert Iger in a written statement.ĭuring a conference call with analysts Tuesday, Iger said that acquisition discussions had been going on for the past several months. And John Lasseter, the highly respected creative director at Pixar who had previously worked for Disney, will rejoin the House of Mouse as chief creative officer for the company's combined animated studios and will also help oversee the design for new attractions at Disney theme parks. "Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world."Īs part of the deal, Jobs will become a board member of Disney, the companies said. "Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders," said Jobs in a statement.