Comcast Outbid: Disney Raises Fox Offer to $71 Billion
- Tax Accounting and Finance
- The Knowledge Group
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The Walt Disney Co. has upped its bid for key 21st Century Fox television and film assets, Fox has accepted the offer, and Disney is poised to win antitrust approval for the deal. Fox shares promptly rose more than 8%, to an all-time high. The acquisition will help Disney expand internationally.
- $71.3 billion; and
- The assumption of about $13.8 billion of Fox debt.
Disney’s $38-a-share bid is approximately $10 per share higher than its December 2017 bid — the rise resulting from a 2018 bidding war against Comcast.
Fox is now providing its investors time to analyze the terms of Disney’s latest proposal. Disney’s terms offer Fox shareholders the ability to receive their payments in stock shares or cash if they prefer — up to a 50/50 ratio. Conceivably, the window of time for the investors’ evaluation could enable Comcast to regroup and come up with even sweeter terms than those it offered earlier in June.
Following AT&T Success, Companies Get Aggressive With Deals
This dealmaking activity follows AT&T’s recent big court win. The Department of Justice challenged AT&T’s purchase of Time Warner in an October 2017 lawsuit, on the grounds that the buy would drive up prices in the market. But a federal judge sitting in Washington has sided with AT&T, clearing the way for the buy to go through, with an inevitable effect: emboldening companies to get more aggressive with dealmaking.
Following the deal with Disney, Fox itself is creating a portfolio for stockholders that features several lucrative sports, news, and broadcast units. The “new Fox” portfolio will serve as a growth company with rights to air the NFL, MLB, NASCAR, and the World Cup. And Fox and Comcast are competing over who can get the most of Sky TV, the British pay-TV company — pushing Sky stock skyward.
The media sphere is undergoing major changes, with the Netflix model supplying video products over a growing array of platforms, and the traditional brands looking to consolidation as a way to ensure their continued prominence in the industry.
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