Disney raises bid for Fox assets to $71.3bn, topping Comcast

Thursday, 21 Jun, 2018

In a (perhaps not so shocking) turn of events, the Walt Disney Company has reentered its tug-of-war with Comcast over the acquisition of Fox's film and TV divisions with a new $71.3 billion bid today.

Disney's first offer of $52.4 billion was based all in company stock, but after Comcast came out swinging with a $65 billion all-cash offer Disney showed it would not go down without a fight.

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

"We are extremely proud of the businesses we have built at 21st Century Fox, and firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace at a dynamic time for our industry", said Rupert Murdoch, Fox's Executive Chairman, according to Deadline. Still, Fox said that the new Disney/Fox deal "contains no changes to the provisions relating to the company's directors' ability to evaluate a competing proposal", giving Comcast an opening to bid again.

In a call with analysts, Iger said he believes Disney's bid is superior to Comcast's from a regulatory perspective. Disney will also now control the rights to such current Fox cinematic franchises as Avatar, Planet of the Apes, Alien, Predator, Die Hard, Kingsman, Ice Age and Night at the Museum. In 2017, they had 21.8% while 20th Century Fox had only 12%. The bidding war comes after AT&T bought Time Warner for $81 billion, after a federal judge rejected the government's antitrust concerns. But a sky-high Comcast bid will make that tricky. "After six months of integration planning we're even more enthusiastic and confident in the strategic fit of the assets and the talent at Fox", said CEO Bob Iger in a statement.

It's another blow to Comcast's efforts to obtain the same assets Disney seeks. The company isn't just a cable provider, he said, but a broadband provider, too.

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In morning trading, shares of 21st Century Fox rallied 6 percent to $47.47.

Under the amended and restated Disney Merger Agreement, Disney would acquire those businesses on substantially the same terms, except that, among other things, Disney's offer allows 21CF stockholders to elect to receive their consideration, on a value equalized basis, in the form of cash or stock, subject to 50/50 proration.

The New York Times reported last week that Comcast was determined to buy Fox's film and TV assets after a deal to absorb Disney fell through in 2004, which sources told the newspaper Comcast views as a mistake.

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

Stay tuned to Heroic Hollywood for the latest developments on Disney and Comcast's bids for Fox's assets!