The diversity of the holdings-more than 100 titles, including business magazines and daily newspapers-has media giants and niche players alike scrambling to line up financing.
If the pieces are broken up, as is widely expected, analysts predict Disney could reap more than $3 billion from the sale.
"I've told our people it could easily be $2.5 billion to $3 billion if it is broken up," said David Londoner, media analyst with Schroder Wertheim & Co.
INTRIGUING GANNETT SCENARIO
A list of publishers not interested in some part of the empire would be far shorter than one of publishers that are. But among the most intriguing scenarios to surface: that Gannett Co. is exploring the formation of a consortium of non-competitive players to make one bid for all the properties and then divide the spoils.
Gannett, which would be interested in the newspapers, declined comment.
Other potential bidders considered among the top tier include Advance
Publications, a newspaper publisher and parent of Conde Nast Publications; Hearst Corp.; Times Mirror Co.; VNU USA; Knight-Ridder; E.W. Scripps Co.; Dow Jones & Co.; Cox Enterprises; and specialty publisher Meigher Communications.
$1 BIL FOR ONE NEWSPAPER?
'It could become the biggest publishing deal of all time," said John Morton, media analyst at Morton Research. "It looks like Fort Worth [Star-Telegram] could go for $500 million and Kansas City [Star] could go for $800 million or even $1 billion."
Mr. Morton estimated the total newspaper price tag alone could reach $2 billion.
If Disney gets more than $3 billion overall, it will top News Corp.'s record $3 billion acquisition of TV Guide parent Triangle Publications in 1988.
In addition to the newspapers, the Disney print holdings include Fairchild Publications, a group of 12 titles such as W, Women's Wear Daily and the Daily News Record; a collection of financial publications and newsletters under the Institutional Investor banner; agricultural titles; city book Los Angeles; and media trades Multichannel News and Cablevision.
UP TO $210 MIL IN PROFITS
Analysts estimated operating profits between $170 million and $210 million on revenues of $1.3 billion for the fiscal year ended Sept. 30, 1996.
Disney's consumer magazine group, including Disney Adventures, FamilyFun and Discover, and its Hyperion book imprint are not part of the divestment.
Within the next several weeks, Disney expects to pick an investment banker to handle the deal. Speculation is that Allen & Co., which helped Disney orchestrate the $19 billion buy of Capital Cit-ies/ABC, may play a key role.
A company spokesman said different divestment options will be considered, including a sale, asset swaps, a spinoff to shareholders and even the retention of certain assets.
Since most of the properties have been held by Cap Cities/ABC for years, the capital gains tax bite from liquidation at this point could be huge. For that reason, some say Disney may be more intrigued by asset swaps and cash-free stock transfers that minimize the tax exposure.
Some media giants may only kick the tires. Asked last week about the company's interest, Time Warner Chairman-CEO Gerald Levin formed a circle with his fingers and said, "Zero."
Insiders, however, say Time Publishing Ventures will at least take a look at Fairchild, Institutional Investor and maybe even the trade group's agricultural titles for its Southern Progress unit.
Advance Publications President Donald Newhouse said only: "Any decisions concerning Advance will be made by my brother [Advance Chairman S.I. Newhouse Jr.] and myself."
PAST CONDE NAST INTEREST
Conde Nast executives have in the past communicated to Disney Chairman-CEO Michael Eisner the company's interest in buying the Fairchild fashion properties.
VNU USA, the U.S. arm of the Dutch publishing concern, also has expressed interest in Fairchild in the past and is expected to be in the running for that and other business units. VNU USA Chairman-CEO Gerald Hobbs did not return calls by press time.
K-III Communications is believed to be particularly interested in adding Los Angeles to a stable that already includes New York Magazine and Chicago. Additionally, some of the trade titles could fit with its Intertec Publishing wing.
But K-III may not be as serious a bidder as industry observers expect.
In a conference call last week with Wall Street analysts, Chairman-CEO William Reilly said K-III is not interested in acquiring "any more mother ships," but would be attracted to several of Disney's smaller properties.
Crain Communications Inc., parent of Advertising Age, has also been mentioned as a possible bidder for some of the business titles. Chairman Keith Crain last week said: "It is safe to assume that Crain Communications would be interested in certain titles, but we would not bid on the whole thing."
REED ELSEVIER A PLAYER
Anglo-Dutch publishing giant Reed Elsevier, owner of Cahners Publishing in the U.S., is cash rich and has to be considered a player for the scientific, business and professional publications-especially those with electronic publishing potential.
Advanstar Holdings, which last May was taken over by buyout specialist Hellman & Friedman, has a $1.5 billion equity pool and will also look at some titles.
"Newspapers are not in our world, but we obviously have an interest in business publications . . . and the Institutional Investor group would fit," said Robert L. Krakoff, Advanstar chairman-CEO.
While Hearst might want Fairchild, a juicier plum for the company would be the newspapers. Hearst and Disney are already partners in ESPN, with the former holding a 20% stake. If asset swaps are in order, it could turn out to be a big bargaining chip for Hearst.