BURBANK, Calif. -- Walt Disney Productions ended financier Saul Steinberg's takeover attempt Monday, buying back his 11.1 percent interest in the company at a premium price of almost $300 million and paying him $28 million more for 'out-of-pocket expenses,' Disney officials announced.
Steinberg's family-owned Reliance Holdings Inc. agreed to end all litigation against Disney and to refrain from buying Disney stock for 10 years, Disney said.
The announcement came after a private meeting by the company's Board of Directors Monday morning. The meeting was called after Steinberg, a New York financier, notified the Securities and Exchange Commission Friday of his plans to buy 49 percent of Disney stock.
Disney said it would pay Steinberg $70.33 per share for his 4.19 million shares, or almost $300 million. That is considerably more than the price Steinberg paid when he began buying up Disney stock last spring and more than the $54.25 per share the stock closed at Monday.
Disney chairman Raymond Watson said in a formal statement, 'I am confident with the Reliance situtation now behind, the management of Disney will be able to devote its full energy toward enhancing shareholder values.'
The Disney company has been fighting a takeover bid by Steinberg for several months.
Steinberg announced Friday he had joined forces with other investors, including movie mogul Kirk Kerkorian, to buy Disney. Kerkorian is the majority stockholder of MGM-UA.
Steinberg, whose Reliance Holdings is the largest holder of Disney stock, offered in a letter to Disney directors to buy 49 percent of the company's outstanding stock at up to $72.50 per share.
Steinberg's Disney holdings had amounted to 12.2 percent of outstanding stock until it was diluted by Disney's recent acquisition of Florida's Arvida Corp. for $200 million in Disney common stock. Steinberg unsuccessfully sought to halt the Arvida purchase in federal court, alleging the acquisition was not beneficial to shareholders.
Last week Disney also announced plans to purchase Gibson Greetings Inc., the nation's third largest greeting card manufacture, for approximately $300 million. That move would have further diluted Steinberg's ownership.
Disney's buyout of Steinberg confirms long-held industry speculation that Steinberg was acting, as he had in the past, as a corporate raider -- buying up a company's stock, threatening a takeover and then allowing the company to buy back the stock at a premium in a legal maneuver known as 'greenmail.'