Disney boosts Fox bid to $71.3 bn to counter Comcast

Reuters reports that the $71.3 billion offer comes as a cash-or-stock option, unlike a competing offer from Comcast Corp of $65 billion that comes as a cash-only offer.

"At a time of dynamic change in the entertainment industry, the combination of Disney's and Fox's unparalleled collection of businesses and franchises will allow us to create more appealing high-quality content, expand our direct-to-consumer offerings and global presence, and deliver more personalized and compelling entertainment experiences to meet growing consumer demand around the world", Disney CEO Bob Iger said in statement on Wednesday morning. "We remain convinced that the combination of 21CF's iconic assets, brands and franchises with Disney's will create one of the greatest, most innovative companies in the world", he said in a statement.

This agreement of a new deal is a huge blow to Comcast. 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.

Still, another Comcast counter-offer could value 21st Century Fox at $80 billion.

In a call with analysts, Iger said he believes Disney's bid is superior to Comcast's from a regulatory perspective, and said that six months of dealing with regulators both in the USA and internationally has given Disney a 'meaningful head start'. 21st Century Fox shareholders will receive an exchange ratio of 0.3324 shares of Disney common stock if the average Disney stock price at closing is above $114.32 and 0.4063 shares of Disney common stock if the average Disney stock price at closing is below $93.53.

Reaching more than 1.8 billion subscribers in approximately 50 local languages every day, 21st Century Fox is home to a global portfolio of cable and broadcasting networks and properties, including FOX, FX, FXX, FXM, FS1, Fox News Channel, Fox Business Network, FOX Sports, Fox Sports Regional Networks, National Geographic Channels, Star India, 28 local television stations in the US and more than 350 worldwide channels; film studio Twentieth Century Fox Film; and television production studios Twentieth Century Fox Television and a 50 per cent ownership interest in Endemol Shine Group.

The Justice Department's antitrust division has been reviewing the Disney deal for months, while the investigation into Comcast's bid hasn't started, according to the person. A new date for the shareholder meetings has not yet been announced.

Speaking to analysts on a Wednesday morning conference call, Iger was confident that Disney would prevail over Comcast in the fight to snap up the Fox properties.

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

Iger said Disney has been working with regulators in the US and around the world and has "made a lot of progress" toward obtaining approvals.

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.

The Fox sale would not include major assets such as the Fox News Channel, Fox Business Network, and Fox Broadcasting Company. That offer is now valued at $52.6 billion based on the latest number of outstanding shares provided by Fox.

  • Marlene Weaver