Disney Considering Acquisition of Pixar; Jobs Could Become Largest Individual Disney Shareholder: WS

(sub. req.) dispix1.gifDisney’s dealings with Apple are interesting but its connection with Pixar Animation Studios is close to vital — and a top priority for Disney CEO Bob Iger, who has been able to develop and maintain a good relationship with Pixar chairman Steve Jobs. (The agreement to put Disney content on iTunes, which was made by Iger, is one sign.) Is that rapport strong enough to pull off a Disney acquisition? The Journal reports today that Disney and Pixar are discussing a stock-based option: Disney would pay a premium over Pixar’s $6.7 billion market cap in all-stock deal that would make Jobs, who holds more than half of Pixar’s shares, the largest individual shareholder of the merged company. That, as the Journal notes, “would vault Mr. Jobs into an even more influential place in the media world, where he already holds tremendous sway as head of Apple Computer Inc.” Some chatter in recent weeks even has Jobs becoming chairman of Disney.

No reason here to go into all the background on animation and why Pixar matters so much to Disney. A deal like the one currently under discussion would be a seismic shift in animation entertainment. The key questions beyond the details of any deal … What would it mean for Disney and the company’s media and entertainment activities outside of animation? How would that ripple across those industries? And is the Iger-Jobs relationship, which is working with them as equals, strong enough to survive Jobs’ move to a power position inside Disney?
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Update: Analysts are starting to weigh in … Rich Greenfield, Pali Research says the possible deal, which he suggests could be announced as early as Monday, highlights the value of content. “We continue to believe content is becoming more and more valuable as distribution outlets proliferate. Disney more than any other media company needs high-profile content (characters) to leverage throughout its theme parks, networks, consumer products and Internet businesses.”

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