Walt Disney raises bid for Fox assets to $71.3-B, adds cash

Lula Sharp
June 20, 2018

Disney and Comcast are battling to win Fox's movie and television studios at a time when legacy media and distribution companies are looking to expand to better compete with newer media firms like Netflix Inc that sell their content directly to viewers. In a call with analysts, Iger said he believes Disney's bid is superior to Comcast's from a regulatory perspective, and said that six months of dealing with regulators both in the US and internationally has given Disney a "meaningful head start". Every time it seems as though it's going one way, it goes the other.

The Walt Disney Company has boosted its bid to acquire the bulk of Twenty-First Century Fox, raising its offering to $71.3 billion in cash and stock.

If an all-cash bid does eventually beat a stock offer, it could have a bigger tax hit on Rupert Murdoch, Fox's largest shareholder, who controls 17 percent of the company's voting shares along with his family. This whole deal is far from being over, so we'll make sure to keep you updated on the Fox/Disney deal as new information becomes available.

Fox's share price was up 5% in the immediate aftermath of the announcement, while Comcast shares fell 0.5%.

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Do you think Comcast will continue to raise their offer for Fox?

According to the press release, the terms of the deal are similar to Disney's previous offer except that the new deal would allow 21st Century Fox shareholders to elect to receive cash or stock, subject to a 50/50 proration. This will be the first step that could lead to a bidding war as Disney will then have five business days to put a revised offer on the table, according to its merger agreement. AT&T just bought Time Warner for $81 billion, after a federal judge rejected the government's antitrust concerns. "We remain convinced that the combination of 21CF's iconic assets, brands and franchises with Disney's will create one of the greatest, most innovative companies in the world", he said in a statement.

Fox is retaining some of its assets, including Fox News and Fox Broadcasting Company, and rebranding them into a new standalone company that will be run by Murdoch and his son Lachlan.

If Fox were to start negotiations with Comcast, that could impact plans for shareholders to vote on the Disney deal next month.

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