Chapter 9: An Alliance of Swine
Excerpt from Kingdom Under Siege: The Wall Street War over Disney, by Taylor Johnson.
In July of 1984, time seemed to drag on for the employees of Walt Disney Productions. The ticker-tape ticked away the hours, the Disney price numbers plateauing at around $92 per share as the final, straggling buyers solidified their positions. Ivan Boesky, ever aloof, sat on his kingmaking 8.4% share of stock, his plans unknown, perhaps even to himself. The Disney executives and managers did their best to put a positive spin on the situation, but the tension was palpable. Everyone knew about the time when Frank Oz mocked Boesky using Miss Piggy’s voice. Everyone was sure that it was only a matter of time before Boesky took his revenge.
All around the company, the rumors flew. One rumor suggested that the management was planning to sell out to Holmes à Court to save their own skin. Another suggested that Bill Marriott or Sid Bass or even Roy Disney or Jim Henson were about to throw in their lot with Holmes à Court. Another suggested that Ron Miller was going to burn the company to the ground rather than let Holmes à Court break it apart. Little did they know that there was some truth to this latter rumor.
At a contentious Board of Directors meeting, the directors discussed their dwindling options. Perhaps they could pay greenmail to Holmes à Court or one of his collaborators. However unpalatable, greenmail was better than death. Card Walker suggested a darker path: a “poison pill” in the form of a self-tender. They would put out an open call for shares at $120 per share. This would certainly break the Kingdom Acquisitions coalition, but it would saddle the company with crippling debt.
“It’s suicide,” said Stanley Gold. “Please tell me that this is a bluff to set up a buy from someone.”
“In ancient Rome a general would fall on his sword rather than be captured by barbarians,” said Walker.
“You can throw
yourself on your sword, Card,” said Gold, “But this isn’t some Viking funeral where we all jump on the pyre with you.” The mixed metaphor, however awkward, hit home with the board.
The meeting ended without any consensus. Afterwards, Gold took Gottesman aside. “Al, this is insane. I’m advising Roy that if the board supports the self-tender, then he takes them up on it. Cash in his chips at 120 [dollars a share].”
Gottesman told Gold that he and Henson had discussed such a strategy. “Jim would walk away with over half a billion [dollars], enough to build his own studio from the ground up, Muppets or not. He’s also considering just taking the buyback.”
“Let us know his plan when he makes it, Al,” said Gold. “Roy and I may just become investors in whatever he’s doing next.”
The two shook hands.
But back at the boardroom, the arguments went on, and all through the company, the rumors continued to fly, grow, multiply, and mutate.
Still, the tickertape clicked away the hours.
Finally, they received a call from Ivan Boesky’s business manager. Ominously, the infamous arb wanted to talk to the full board. A call was arranged for Friday, the 13th of July. More ominously, the manager added: “Mr. Boesky wants to talk to the pig. Make sure that the pig is there.”
This sent a new buzz through the halls of Disney. Why did he want to talk to Oz? Was this some bizarre power play? A threat? Was he planning to gloat as he declared his sale to Holmes à Court?
They would have no choice but to wait and see[1].
[1] As will you, my lovely audience! Last cliffhanger. It all comes to a definitive answer next time one way or another, I promise.
