LOS ANGELES Disney fights back against claims made by ex-board members

The company urged shareholders not to be 'misled.'
LOS ANGELES (AP) -- The Walt Disney Co. took the offensive Monday against two former board members, touting the Disney brand in full-page newspaper ads and writing shareholders to outline the company's recent accomplishments.
The moves come two days before Disney is expected to release strong first quarter earnings and follows an aggressive campaign to oust Disney chief executive Michael Eisner waged by former board members Roy E. Disney and Stanley Gold.
In a "Dear Shareholders," letter dated Friday, Disney's 13 board members outlined the "company's real turnaround" over the past year and urged shareholders not to be "misled" by claims made over the past few months by Gold and Roy Disney.
"You should be disturbed by this attack, which comes at a time when your company is achieving very positive results," the letter stated.
The letter repeats the company's expectation of earnings growth of at least 30 percent in 2004 and adds that the board expects to add another independent director this year.
Defending Eisner
The letter also offers the company's first formal defense of Eisner's record.
"And they totally ignore the impressive performance record of Michael Eisner, who, as one of the company's largest individual shareholders, is fundamentally focused on your interests," the letter states.
The letter points out that Disney's stock rose 43 percent in 2003, compared to a 26 percent gain in the Standard & amp; Poor's 500 index.
Roy Disney and Gold have complained that Disney's stock price underperformed major indexes from 1996 through 2003.
"They're trying to defend Mr. Eisner's positions in many different facets of the company leading up to the shareholder meeting," David Miller, an analyst with Sanders Morris Harris, said Monday of the company's letter. "They're saying, 'Let our financial performance speak for itself and whatever critics are out there, let's silence them with our numbers."'
The company is expected to report significantly higher earnings this week, boosted by profits from its film studio and improvements at its theme parks and television networks.
Response
Roy Disney and Gold replied quickly to Monday's letter, saying that if the company reaches its financial goals for 2004, earnings will still be approximately on par with those achieved six years ago.
"It appears that the board continues to resist independent, thoughtful consideration of opinions raised in opposition to Michael Eisner," they said in a letter to board members.
Last week, the Disney dissident group sent a letter to company board member George Mitchell, challenging the company to release letters and presentations Gold and Roy Disney made to the board over the past two years.
The dissidents also challenged the company to respond to a list of questions they plan to pose next week about Disney's recent financial performance.
Both sides in the corporate dispute have been wooing large shareholders and corporate governance proponents over the past few months. Eisner and Mitchell have met with key financial analysts and others.
Gold and Roy Disney are planning to make their case on a conference call with institutional shareholders Wednesday -- the same day Disney releases its first quarter earnings.