Disney Ups Fox Bid to $71.3 Billion, Outflanking Comcast

Jeannie Matthews
June 20, 2018

Disney's latest move raises the hurdle for Comcast, which now has to decide whether it is feasible to come back with a higher bid. Both Disney and Comcast are looking to use the Fox assets to bolster their content and expand overseas.

If it does, Fox would then be allowed to negotiate with Comcast and take a closer look at its offer.

Disney has boosted its offer for 21st Century Fox to more than $71bn in a bid to knock rival Comcast out of the battle to buy the bulk of Rupert Murdoch's entertainment empire.

That's more than the $65 billion Comcast (CMCSA) offered a week ago.

Of course, when all is said and done, should 21st Century Fox be willing to dance with The Walt Disney Company, there's a good chance the United States Department of Justice Antitrust Division will intervene.

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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.

According to the trade the new offer is approximately $19 billion larger than the one Fox accepted previous year, and almost 10% higher than the $65 billion offer Comcast put on the table last week. "Further hampering Comcast's ability to respond is its position that it does not want to use its stock in a deal at these low levels".

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

Analysts have been gearing up for more media consolidation following last week's approval by a U.S. judge of a massive $85 billion takeover by telecom-broadband giant AT&T of media-entertainment conglomerate Time Warner. Comcast and Disney each own a 30 percent stake in Hulu and Time Warner holds 10 percent. Disney's amended offer, made as Fox's board convenes for a regularly scheduled meeting, is a combination of cash and stock.

The deal does not include Fox News, the Fox broadcast network, television stations, Fox Sports 1 and Fox Sports 2. The acquisition price implies a total equity value of approximately $71.3 billion and a total transaction value of approximately $85.1 billion (assuming no tax adjustment). Fox has attempted to acquire the portion of Sky that it doesn't already own, but Comcast swooped in with a higher bid.

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