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"Disney Buying Pixar" Rumors Gaining Strength

by on January 22, 2006

A report in Thursday’s Wall Street Journal (summarized by Reuters) quoted unnamed sources stating that the Walt Disney Company was in serious talks to acquire Pixar Animation Studios, paying a small premium over Pixar’s market value of $6.7 billion at the time. Since that time, more details of the story have come from a report in today’s New York Times and one in the Los Angeles Times (registration required for both), stating that the Disney board may be meeting this weekend to discuss the acquisition and that an announcement may be made as early as Monday.

If the deal is completed as described, it would make Pixar CEO Steve Jobs the largest shareholder in the Walt Disney Company, possessing approximately 6% of outstanding shares (for comparison, former Disney CEO Michael Eisner would be the next-largest shareholder, owning 1.7% of all outstanding shares).

This story has been picked up by several other mainstream media outlets and raised share prices for both Disney and Pixar briefly. Ironically, the positive reaction from Wall Street may result in a scuttling of the deal if Pixar’s market value ends up exceeding the amount Disney is willing to pay for it.

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