Originally Posted By Spirit of 74 <<It wouldn't be far-fetched to think that any takeover might involve the selling off of the French Disney property to developers.>> It would be so far-fetched to be damn near impossible. Disney close a Magic Kingdom ... let alone TWO theme parks and SIX resorts. Yeah, sure. That's gonna happen because the land is valuable. Just look at the uproar over something much smaller (and also something not going to happen) in the combining of DCA with DD ... can you imagine the type of PR disaster if Disney were to throw in the towel and sell and bulldoze the most beautiful MK of all for condos and SuperWalmarts? Yeah ... like I said ... this is realistic.
Originally Posted By Park Hopper Personally, I can’t conceive of a reason why anyone would want a theme park resort that comes with a 1.4 billion dollar debt. Surely there are better business opportunities in the leisure industry than this.
Originally Posted By SuperDry <<< No idea what crackpot legal advice they are getting but a change of control will revoke the licensing agreement and TWDC could opt to prevent the acquirer from using the characters (and hence could not even open the gates). They would have to negotiate an assignment on that contract to have any hope of taking over EuroDisney. It is exactly the same with OLC in Japan. >>> Leemac, could you explain this in a little more detail? As I understand it, TWDC already owns a minority interest in EuroDisney SCA, with the majority of shares being publicly traded on the French stock market? So what would the change of control be? Are you talking about the management contract? My understanding is that unlike with TDR, where OLC manages the park, EuroDisney has hired TWDC to provide management services. If the majority of EuroDisney shareholders were to decide to discontinue purchasing management services from TWDC and do it themselves (or hire someone else to do it), wouldn't they be able to do this? Of course, whatever the new management was would still be obligated to pay royalties to TWDC, pay for WDI services, pay for onsite TWDC supervision, and have TWDC approve certain aspects of operation, but wouldn't they be able to make day-to-day management decisions themselves(within the framework of TWDC approval) just like OLC does at TDR?
Originally Posted By paulyahoo DLP corporate structure is described on pages 20-21 of their 2005 annual report: <a href="http://www.eurodisney.com/en/pdf/annual_review_2005_eng.pdf" target="_blank">http://www.eurodisney.com/en/p df/annual_review_2005_eng.pdf</a> EuroDisney SCA is an operating company: Euro Disney Associés S.C.A. (“EDAâ€) EDA operates Disneyland® Park and Walt Disney Studios® Park, the Disneyland Hotel, Davy Crockett® Ranch and Golf Disneyland® and manages the real estate segment of the Group. ...... The Phase IA Financing Company, Euro Disneyland S.N.C., a company incorporated as a société en nom collectif owns Disneyland® Park and leases it to EDA.
Originally Posted By leemac <<Leemac, could you explain this in a little more detail? As I understand it, TWDC already owns a minority interest in EuroDisney SCA, with the majority of shares being publicly traded on the French stock market? So what would the change of control be? Are you talking about the management contract?>> I must admit I don't fully understand your question SuperDry. If this takeover succeeded it would almost certainly meet the definition of Change of Control of EuroDisney SCA and Disney could ultimately revoke all agreements in palce including the management contract, licensing agreements etc.
Originally Posted By SuperDry <<< I must admit I don't fully understand your question SuperDry. If this takeover succeeded it would almost certainly meet the definition of Change of Control of EuroDisney SCA and Disney could ultimately revoke all agreements in palce including the management contract, licensing agreements etc. >>> First of all, let me say that I'm certain that I know far less about the TWDC/DLP arrangements than you do, so please forgive me if I get something wrong. I am genuinely asking you for clarification. When you say "Change of Control" (with caps) I am assuming that you're referring to a particular clause in one of the many agreements between EuroDisney SCA (or an affiliated company) and TWDC that govern the operation of DLP. One question I have is exactly what is meant by "Control" given the current situation of TWDC owning about 40% of EuroDisney SCA, 10% owned by the Saudi prince, and the remaining 50% owned by other parties as traded on the French stock exchange. Perhaps I'm looking at it from the point of view of someone only familiar with American listed companies and am not understanding the intracacies of French law, but there doesn't appear to be any single entity that's currently in control of EuroDisney SCA. That is, who has the power to appoint or remove members of the Board of Directors, and thus indirectly the management team? It would appear to me that no single entity currently has that power, and that a consensus of shareholders is necessary in order to make any binding decision (of which TWDC is the largest with about 40% ownership). But if some other party were to aquire 50% + 1 share of stock (which would seemingly require the Saudi prince to sell some of his interests), they would seem to aquire a controlling interest. Would this constitute a "Change of Control" considering that no single party currently has that control? Separately, you seem to lump the management contract together with the licensing agreement, where I had always considered the two to be completely independent. I realize that in the case of DLP (and HKDL for that matter) that TWDC never seriously considered the possibility of an outside entity being awarded the management contract, but I'm talking about the theoretical situation of this happening in Paris, and how the contract terms would address such a scenario.
Originally Posted By leemac Disney have historically been responsible for the nominations of the board of directors but like most European companies the slate does have to be ratified by the shareholders. I appreciate that there isn't a single entity in control of EuroDisney SCA at present (although from a legal stance I could probably argue that it is Disney themselves) but if this potential acquirer launches a takeover (and hostile presumably too) that would constitute a Change of Control. I can't see how they can even reach the necessary level to compulsorily enforce a sale (in the UK there are provisions that allow an acquirer to force shareholders to sell their stakes once they have accumulated a sufficient number). And the management/licensing agreements will be intrinsically linked. I suspect they could be separated but I'm sure there are cross-provisions.
Originally Posted By mrichmondj Although Disney does not have a majority ownership interest, they retain a majority voting interest that was negotiated when their shares were bought out by the Saudi Prince in the 1990s. In effect, the Saudi Prince has given Disney voting rights on the shares that he owns. Anyone who thinks a hostile takeover by an investment firm is a good thing for DLP has absolutely no clue whatsoever how these firms operate. There are no altruistic goals whatsoever other than buying up companies that have cash flow, bleeding off the cash, selling pieces of the operations to get more cash, and then fleeing the scene when there is nothing left to milk from the business.
