Disney Fox Acquisition Solidified With $71.4 Billion Deal

The X Men may be headed to Disney after all.                  21st Century Fox

The X Men may be headed to Disney after all. 21st Century Fox

As of this writing, Rupert Murdoch, executive chairman of 21st Century Fox, believes that Disney is putting out the better offer, but is totally open to accepting a bid from Comcast should they raise it.

While a counter-offer by Disney was expected, the $70-plus billion figure is reportedly higher than what many insiders were counting on. Shares of Disney rose 29 cents to $106.47 and Comcast shares rose 22 cents to $33.03 United States dollars.

Fox said it would now allow shareholders to evaluate Disney's amended offer. Iger also acknowledged that one of the more attractive elements of the proposed deal had to do with how the Fox content library and studio assets would go a long way toward arming Disney for a war of attrition with Netflix.

This stake now stands at 39.1% but Fox is seeking to take full control of the business prior to selling it on to Disney.

AT&T structured its $85 billion deal to buy Time Warner to avoid such a review.

The move comes a week after Comcast, the US cable giant, offered $65bn in cash for the assets, which include 20th Century Fox - the Hollywood film studio behind hits such as Avatar, X-Men and Ice Age - US cable TV networks including FX and National Geographic and worldwide pay television assets including Star TV in India.

Disney said it expects to pay a total of about $35.7bn in cash and issue 343 million new shares to Fox shareholders, representing about a 19% stake in Disney, with the deal valued at $71.3bn.

Disney said the value of the assets - which include production companies responsible for "The Simpsons" and "Modern Family", as well as film production businesses - had increased compared to December due to tax reform and operating improvements. "There has just been not only a tremendous amount of development in that space, but clearly the consumer is voting-loudly". Also included is Fox's 30% stake in Hulu and 39% interest in Euro satellite broadcaster Sky.

Both Disney and Comcast could use it to expand globally.

The deal became possible when Murdoch, 87, and his sons made a decision to slim down their media-entertainment empire, leaving them with the Fox News Channel, the Fox broadcast network and sports cable operations.

"I think Comcast would be the most leveraged company ever". If 21st Century Fox completes its acquisition of the 61% of Sky it doesn't already own prior to closing of the Disney acquisition, Disney would assume full ownership of Sky, including the assumption of its outstanding debt, upon closing.

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