"The goal here, above all else, is to make great animated films… the rest kind of takes care of itself." ---Robert Iger
Media juggernaut and historic founder of the domestic animation industry, The Walt Disney Co. has been newsworthy over the past two years mostly for reasons the animation community would consider unfortunate. The continual closing of feature animation production studios internationally, the then souring relationships within the company's Board of Directors, the unpopular investment solely into CG films, a small number of bitter lawsuits and the forcing out of CEO Michael Eisner--all have been reasons for many to question the managerial integrity and creative fortitude of Disney's role in the animation industry.
Nevertheless, with the increase in the company's reliance upon computer animation came the advent of Pixar film after Pixar film, with an increased emphasis on franchise merchandising came the debate of HD-DVD v. Blu-Ray (of which Blu Ray looks to be the victor), and with Eisner's resignation came the ascension of one Bob Iger--Disney's previous President and Chief Operating Officer. And as such, the birth of what many have hoped to be a newly directed Disney lay promptly in the hands of Eisner's successor. In a move to increase the number of quality feature animation productions on the market, Iger pulled off what a few years ago, many felt was unthinkable: The Walt Disney Co. acquired Pixar Animation Studios.
Although not entirely shocking to those with their ears to the animated grapevine, the acquisition of Pixar by Disney is the result of numerous talks between President and CEO Bob Iger and Chairman and CEO of Pixar, Steve Jobs. This acquisition as seen by several, is on one hand the best thing that can result from what once was a noticeably bitter, corporate relationship. From where Disney's relationship was at the time of CEO Michael Eisner's resignation, to where Disney's relationship is with the 2006-year just beginning, much has changed. Talks between Iger and Jobs, as seen by few key executives at Disney, were a top priority.
Additionally, given that the distribution contract between the two companies was scheduled to expire after the planned theatrical release of Cars (date: June 9th 2006), and given the subsequent reports of Jobs having been graciously offered by Sony and Time Warner a distribution deal (upon the expiry of said contract), there was indeed some reason for Iger's urgency. In a conference call with investors on Thursday, January 26th 2006, Steve Jobs commented on the matter: "I have to say that as we explored Lucasfilm type [distribution] deals, we saw a lot of attractive things. We had a lot of smart, nice people who courted us and made us feel really wanted. So, the reason that we did this deal wasn't because we didn't think we had some pretty good options, it's because we thought this was the best option by far."
With The Walt Disney Co. purchasing/acquiring Pixar Animation Studios for a price tag of $7.4 billion in stock, the company certainly has confidence in their decision. The hefty price tag found Pixar shareholders receiving a four percent premium on the closing of Tuesday's stock. The Pixar stock closed at $57.57 on Tuesday, as Disney, in the all-share deal, paid for stock at $59.78. The premium of the acquisition increased sharply when Pixar's stock fell from Monday, then at $58.27, which with the then purchase price of $59 a share would have set the deal at roughly $6.93 billion. The price Disney settled on, although large for a single animation production studio and its properties/characters, the purchase is in what many financial analysts have commented, is out of respect for and with consideration to the "success quotient" Pixar has built over the past twenty years.
The stock of Pixar Animation Studios has surged a notable 10% this year on takeover speculation alone. And regarding trading for Tuesday, the day of the acquisition in question, while Pixar's shares did fall as previously mentioned the stock gained 3% in after-hours trading. Additionally, the stock of The Walt Disney Co. itself increased 1.8% on the day of acquisition. The purchase of Pixar Animation Studios will, according to sources, give investors much to anticipate over the next few years; this given the fact that many investors have lost interest in Disney over the past two to three years during the company's recent stock stagnation. The stagnation, experts say, was due in part to the company's production of and an over-reliance upon direct-to-video sequels and box-office misses through Walt Disney Feature Animation. With the acquisition of Pixar, The Walt Disney Co. investors will now have some reassurance of the marketability of the company's theatrical animation releases and domestic releases as well.