Shares in Walt Disney Coclosed higher on Wednesday, the day after the media conglomerate announced thatit had finalised its negotiations to sever ties with Miramax co-chiefs Harveyand Bob Weinstein.
Disney shares on the NewYork Stock Exchange were up 45 cents, or 1.61%, at $28.35.
The long expected move waswelcomed by analysts who said that the split would help Disney's bottom line.
"Wefind it encouraging that this significant and lingering issue has beenfinalized quickly after Bob Iger was named incoming CEO [at Disney]. So we seethis as one medium-sized issue down, and a few big ones still to settle,"Credit Suisse First Boston analyst William Drewry wrote in a note to clients.
GoldmanSachs' Anthony Noto said: 'The creative loss does not change our positiveinvestment thesis of [Disney].'
Underthe deal announced yesterday Disney will retain ownership of the Miramax nameand its 550 film library. Disney is expected to reduce its funding of theMiramax label by several hundred million dollars, according to analysts at CIBCCapital Markets. "We expect Disney to make 5-7 films a year under the Miramaxbrand versus 15-20 in 2005," said Michael Gallant at CIBC.
Meanwhile,The Financial Times reported that the Weinsteins are raising up to $1bnto fund their new outfit. The paper said that they had brought in GoldmanSachs, the investment bank, and the Blackstone private equity group, to helpfinance the new Weinstein Company.
Upto 100 Miramax employees - a third of the total - are expected to join the newventure.