The Walt Disney Company’s (NYSE: DIS) CEO, Bob Chapek rejected calls by an activist investor, Daniel Loeb’s Third Point LLC, to spin off ESPN. In an interview with Financial Times, Chapek pointed out that Disney had been inundated with interest from companies this year following the rumors that Disney could spin off or sell the cable network.
Chapek told Financial Times, “If everyone wants to come in and buy it . . . I think that says something about its potential. I think its potential is within the Disney company.”
He added that Disney had plans for ESPN that will “restore ESPN to its growth trajectory.”
Loeb Appears to Back Off From ESPN Spin-Off
On Sunday, following Chapek’s comments, Loeb appeared to back from his push to spin off ESPN. He tweeted, “We have a better understanding of @espn’s potential as a standalone business and another vertical for $DIS to reach a global audience to generate ad and subscriber revenues. We look forward to seeing Mr. Pitaro execute on the growth.”
Last month, Third Point announced that it had upped its stake in Disney and had bought less than 1% of its total outstanding shares valued at around $1 billion.
At that time, Loeb, in a letter to Disney’s management had called for Disney to spin off ESPN and purchase Comcast’s (CMCSA) 33% stake in Hulu, among other measures.
Chapek commented on Comcast’s stake, “We have talked to them numerous times over the past year-plus. If that were in the cards we would love to do that, but it takes two to tango.”
Is Walt Disney Stock a Buy, Sell, or Hold?
Analysts are bullish about DIS with a Strong Buy consensus rating based on 17 Buys and three Holds.
DIS’s average price forecast of $144 implies that the stock has an upside potential of around 25%.
