Updated from 11:14 a.m. EST

Comcast

(CMCSA) - Get Report

launched a bold hostile takeover bid for

Disney

(DIS) - Get Report

Wednesday, saying its efforts to draw beleaguered CEO Michael Eisner into merger talks had been rebuffed.

The media giant said it would evaluate the cable titan's offer. Disney shares surged and Comcast's fell as investors considered the implications of the huge move.

Comcast shocked Wall Street Wednesday by offering to swap some $54 billion in stock for the storied entertainment behemoth. The cable giant termed the deal a perfect match of Disney's content and Comcast's distribution. "This is an incredibly compelling combination," Comcast CEO Brian Roberts said at a press conference Wednesday morning.

Disney responded first by posting

blowout fiscal first-quarter earnings and later by saying it would consider the bid in due course.

Disney "has received and will carefully evaluate the unsolicited proposal from Comcast Corp.," the company said in a late-morning statement. "In the meantime, there is no action for shareholders to take.

"Today and tomorrow, the company will present to Institutional Investors and Analysts at a previously scheduled conference its broad array of unique and valuable businesses, as well as the strategies being deployed to fully realize the tremendous long-term value of those assets," Disney added.

Rejection

Comcast offered to exchange 0.78 of a Comcast Class A share for each Disney share, valuing the Disney shares at $26.47 on the basis of Tuesday's close. On Wednesday morning, Disney surged 15% to $27.61, while Comcast slid 8% to $31.23.

The proposed deal's overall value is $66 billion, including about $12 billion of assumed debt. Disney shareholders would end up with about 42% of a combined company. Prior to the offer, Comcast's two share classes had a combined market value of about $76 billion, while Disney was worth about $49 billion.

Comcast said it launched the bid after Disney chief Eisner refused to enter negotiations over a friendly merger. The bid comes as Eisner fends off criticism from dissident board members, most notably Roy Disney, the nephew of founder Walt Disney, and from Stanley Gold, about supposed creative and operational failures at the conglomerate, whose holdings include theme parks, movie studios, the ABC television network, the Disney Channel and ESPN.

Roberts lamented Eisner's unwillingness to negotiate a friendly deal in a letter to him and the Disney board.

"I am writing following our conversation earlier this week in which I proposed that we enter into discussions to merge Disney and Comcast to create a premier entertainment and communications company," Roberts wrote. "It is unfortunate that you are not willing to do so. Given this, the only way for us to proceed is to make a public proposal directly to you and your board."

Comcast, the country's largest cable operator, with about 21 million subscribers, scored a major success last year with the integration of AT&T Broadband. Disney, on the other hand, has recently been engulfed in a high-profile dispute with another cable operator, Comcast rival

Cox Communications

(COX)

, over how much it charges for ESPN. While Disney has disputed Cox's claim that it's seeking a 20% increase in the price paid to carry ESPN, Cox has taken the battle public and currently operates a

Web site decrying the fees.

Gearing Up

In retrospect, Comcast's daring bid was presaged in December, when it entered a forward sale agreement to unload a huge chunk of

Liberty Media

(L) - Get Report

shares for close to $900 million. Comcast agreed to sell 75 million to 100 million of the more than 200 million Liberty shares it got in exchange for its ownership stake in QVC.

A handful of media company shares were higher on news of the bid, including

Time Warner

(TWX)

, up 20 cents, or 1.2%, to $18;

Viacom

(VIA.B)

, up 40 cents, or 1%, to $41.50; and

Sony

, up 50 cents, or 1.2%, to $41.50.

Comcast boasts among its management ranks a longtime Disney insider, its head of cable television operations, Steve Burke. Before moving to Comcast, Burke was president of ABC Broadcasting, overseeing 10 ABC-owned television stations; the ABC Radio Group, consisting of 27 radio stations and eight radio networks; and Buena Vista Television, the company's domestic syndication arm.

At Disney, Burke helped develop and found Disney Stores, one of Disney's fastest-growing businesses, with more than 680 stores in 11 countries. In 1992, he moved to Euro Disney SA, where, as president and chief operating officer, he helped lead a major restructuring.

"I know Disney's businesses very well," Burke said in a release. "And I am confident that when we put those great brands and programming assets together with our distribution, there will be significant opportunities to produce compelling returns for shareholders."