PHILADELPHIA — Cable giant Comcast Corp. dropped its 2-month-old unsolicited bid for The Walt Disney Co. on Wednesday after being rebuffed by Disney and encountering resistance from its own shareholders.
The offer, originally valued at $54 billion, was rejected by Disney as too low, while Comcast investors clearly objected to a new, higher bid that would have diluted the value of their shares.
The nation's largest cable provider said it would look for other growth opportunities, including bankrupt Adelphia Communications Corp., and go ahead with a previously announced $1 billion stock repurchase program sidelined while the Disney bid was pending.
Disney promised to stay the course with its current management.
Comcast stock rose 23 cents to close at $30.20 a share on the Nasdaq Stock Market, while Disney shares fell 23 cents to $23.95 on the New York Stock Exchange.
Brian L. Roberts, president and chief executive of Comcast, said Disney's management made clear it had no interest in putting the two companies together.
"As a result, we have withdrawn our offer," Roberts said. "We have always been disciplined in our approach to acquisitions. Being disciplined means knowing when it is time to walk away. That time is now."
Comcast also reported Wednesday that it had a profit of $65 million, or 3 cents a share, for the first quarter, from a loss of $297 million, or 13 cents a share, in the first three months of 2003. Revenues rose nearly 10 percent to $4.9 billion.
Comcast stunned the industry Feb. 11 when it offered to buy the media and entertainment powerhouse for stock valued at the time at $54 billion. Disney rejected the offer and rebuffed calls from Comcast to discuss a merger.
Comcast made its offer as Disney faced attack from dissident board members after several years of disappointing financial results.
Roberts, who first broached the idea of a merger to Disney chief executive Michael Eisner in a call placed from a phone booth, said Wednesday he was surprised that Disney refused to even discuss the merits of the offer.
"It seemed inconceivable to me that they would not want to have a dialogue with the world's premier distribution company," Roberts said. "To that extent, we miscalculated."
Sumner Redstone, chairman of Disney rival Viacom Inc., told a group at the Milken Global Conference in Beverly Hills, Calif., that the deal was a tough sell on both sides.
"The amount of money that they would have to offer to get Disney would be so great that they would have an investor revolt on their hands if they did it," Redstone said.
"My guess is that's what they realized, particularly with the hostile approach to this."
Roberts acknowledged that his own investors were concerned that the Disney offer signaled a loss of confidence in Comcast's core cable business.
"We love the cable business," Roberts said. "We have never been more bullish about cable and its potential for growth in the future."
In a conference call, Roberts said Comcast would look at other acquisition targets, including Adelphia, but didn't feel pressured to expand.
Adelphia said last week it would look at a possible sale of the company as part of its Chapter 11 reorganization.
"The Adelphia situation did not factor into today's announcement," Roberts said. "That's a new situation for sure. We've always looked at cable systems, so I suspect we'll look at those."
Roberts said the company wants to be "opportunistic, entrepreneurial," but added, "with 22 million customers, I think we are in the position where we don't have to make any acquisitions."