Euro Disney Takeover Bid faces obstacles

Reuters chimes in with an article that’s makes the same points that Cody Davis did earlier today. The funny thing is that their lawyer was sick so they didn’t make the official offer today? What he couldn’t have an office assistant fedex something or have a partner step in? You’d think buying Euro Disney would be a pretty big business deal for his firm and he’d want no delays. Do I smell something in Denmark?

Euro Disney takeover bid?

[Update: ed. – Bloomberg reports that the takeover attempt was announced this morning]

Reuters is reporting that Euro Disney SCA (owner and operator of Disneyland Resort Paris) may be subject to a hostile takeover bid by the little-known swiss firm Center-Tainment AG.

MarketWatch had this to say:

A statement from Center-Tainment’s offices said the
company was formed expressly to initiate a public exchange offer for
Euro Disney shares, with the aim of getting at least 50.1%.  After reaching that level, it would
replace Euro Disney management, terminate the operating contract with
Disney Co. and run the park itself.

Euro Disney claims they have not been approached.

Chances of this happening? Not very likely. Euro Disney is an SCA (Société en Commandite par Actions) which would be an LP (Limited Partnership) in the States. This means that there is a general partner, limited partners, a management company, and a supervisory board. Limited partners cannot impose their will on the business. The Walt Disney Company (through a subsidiary) is the general partner and management company of Euro Disney. Disney also has a 39.8% stake in the company. Saudi prince Alwaleed Bin Talal holds another 10% of the shares.

According to the by-laws of Euro Disney SCA:

If the Management Company ceases to hold office for any reason, the General
Partner, currently an indirect 99.9% owned subsidiary of TWDC, has the exclusive
right to appoint a successor.  The Management Company may resign on giving
six-months’ notice to the supervisory board and otherwise may only be removed
from office in the following circumstances:

• for incapacity, including bankruptcy or judicial reorganization by
the General Partner,

• for any other reason with the consent of both the General Partner and
holders of a two-third majority of the share capital of the Company in an
extraordinary meeting; or

• by a court on the grounds of legitimate cause (cause légitime).

What does this all mean? Essentially, a hostile takeover would be very hard to pull off and would have to be done with the consent of Disney.