Disney ups Fox bid to $71.3 billion

21 June, 2018, 01:47 | Author: Courtney Perry
  • 21st Century Fox

In May, Comcast announced that it was considering a "superior" all-cash bid on the Fox assets and made good on that statement last week with a $65 billion offer.

Fox's board met Wednesday and was understood to be weighing the price tags of bids for the Fox assets that are for sale along with tax bills, which are higher for cash bids, regulatory concerns and other issues.

The tie-up "is an extremely compelling proposition for consumers that will allow us to create even more appealing high quality content, expand our direct to consumer offerings, an global presence and deliver more exciting and personalized entertainment experiences to meet the growing demands of consumers worldwide", Iger told a conference call.

The new cash-or-stock deal may be attractive to Fox's largest shareholder, Rupert Murdoch, who owns 17 percent voting shares along with his family. The deal will also give Disney 60% ownership of Hulu. Even though a federal judge resoundingly defeated the government's lawsuit seeking to block the vertical merger of AT&T and Time Warner, the Disney CEO said he still believes a more vertical blend of Comcast (whose holdings include the No. 1 US cable system) and Fox would face scrutiny. The bidding war comes after AT&T bought Time Warner for $81 billion.

The new Disney offer, which would be in cash or stock divided proportionately, is about $10 higher than Disney's first bid in December 2017.

The Justice Department's antitrust division has been reviewing the Disney deal for months, while the investigation into Comcast's bid hasn't started, according to the person. They are doing exactly that by pursuing the purchase of 21st Century Fox.


The improved offer came as 21st Century Fox board was set to decide whether to back Comcast's bid for assets that include Fox's film and television studios and worldwide businesses.

Granted, even if Fox agrees to a deal, the merger would still be subject to approval by the Federal Trade Commission.

Disney will also take on about $13.8 billion of Fox's net debt, implying a total transaction value of about $85.1 billion.

The deal would include Fox film and TV studios, some cable networks and worldwide assets, but not Fox News Channel or the Fox television network.

Shares of Fox jumped $2.88, or 6.5 percent, to $47.16 in early trading, which may suggest investors are expecting Comcast to return with an upped bid. The acquisition will occur immediately after the spin-off by 21st Century Fox of the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company referred to as New Fox.

Shares of 21st Century Fox are up more than 7% Wednesday, and have gained about 40% this year.

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