Media Moves

Coverage: Disney sweetens the deal for Fox assets

June 21, 2018

Posted by Chris Roush

The Walt Disney Co. sharply increased its offer for 21st Century Fox on Wednesday, as it looks to win a bidding war with Comcast for Rupert Murdoch’s entertainment conglomerate.

Edmund Lee of The New York Times had the news:

In a quickly issued response, 21st Century Fox announced that it had entered into an agreement with Disney, adding that it considered the revamped offer, now valued at $71.3 billion, to be “superior to the proposal” made by Comcast last week.

Disney’s new bid is 35 percent higher than its earlier offer and about $6 billion more than Comcast’s.

Disney’s chief executive, Robert A. Iger, who has staked his legacy on this deal, rapidly put together the new offer just before Fox’s board was to meet Wednesday to discuss Comcast’s proposal, which had topped Disney’s earlier bid. Now Comcast will have to decide whether to counter this latest offer.

The Comcast chief executive, Brian L. Roberts, is equally motivated to reach an agreement with Mr. Murdoch, who has spent a lifetime forging a media empire that spans three continents, including Hollywood studios, cable networks and streaming businesses.

Roger Cheng of CNET reported that Fox calls the offer superior to that of Comcast:

Fox has now agreed to the proposal, calling it “superior” to Comcast’s offer, though that doesn’t stop other companies from making a bid. The deal still needs to be voted on by shareholders.

The new offer shoulders Comcast’s bid out of the way as Disney looks to lock up Fox, which is home to marquee franchises like X-Men, DeadpoolKingsmen, and Planet of the Apes; animated films like Ice Age; and TV assets like The Simpsons and edgy network FX. Disney’s raising of the ante underscores the increasing value of content, following AT&T’s $85 billion purchase of Time Warner.

Comcast had hoped the Fox assets would join a stable of entertainment outfits that include properties run by NBC Universal. Think The Fast and the Furious and the Jurassic World movies, plus a constellation of TV channels — not only those that have NBC in their names but also others like Bravo and Syfy.

Disney, meanwhile, could benefit as well from Fox’s wide range of television and film assets, which could feed into its streaming services, including a planned rival to Netflix sometimes referred to as Disneyflix.

Nick Turner of Bloomberg News reported that the offer gives Fox shareholders more cash:

Disney’s new offer gives Fox shareholders the option to take their payment in the form of cash or stock, up to a 50-50 level. The previous agreement was an all-stock deal, and Comcast’s cash offer was seen as a significant enticement.

Disney also plans to take on about $13.8 billion of Fox’s net debt. That would lift the total transaction value above about $85 billion.

Meanwhile, there’s a separate — yet intertwined — fight for Sky, the British pay-TV company. Fox has attempted to acquire the portion of Sky that it doesn’t already own, but Comcast swooped in with a higher bid.

In any case, Comcast isn’t likely to go away quietly.

Comcast’s current $65 billion cash offer for Fox — along with the potential Sky deal — was already expected to push its debt load to $170 billion, according to Moody’s Investors Service. That leaves CEO Brian Roberts with some tough decisions.


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