Disney Raises Bid For Fox Properties

It was recently announced that Comcast has offered a $65 billion all-cash deal for Fox Studios. And in the spirit of playing hardball Disney is now offering a reported $71.3 billion, which will give Fox shareholders the option to take their payment in the form of cash or stock, up to a 50-50 level. Disney’s previous offer stood at $52.4 billion, and the new offer is even better as Disney plans to take on about $13.8 billion of Fox’s debt, which would bring the total transaction value above $85 billion.

Fox is interested in Disney’s offer, but Comcast can still raise their own offer. In addition, the planned Fox stockholder vote set for July 10 has been delayed, which gives Comcast even more time to change their offer. Comcast could still get the Sky network in a separate deal, which would leave Disney getting Fox Studios, Fox TV, the X-Men, Deadpool, Wolverine, Fantastic Four, the other Marvel properties, James Cameron’s Avatar franchise, The Simpson’s and more.

There is time left for more drama with the delay in the stockholder’s vote. Below is the official media release:

NEW YORK – June 20, 2018 – Twenty-First Century Fox, Inc. (“21CF”) (NASDAQ: FOXA, FOX) announced today that it has entered into an amended and restated merger agreement with The Walt Disney Company (“Disney”) (NYSE: DIS) pursuant to which Disney has agreed to acquire for a price of $38 per 21CF share the same businesses Disney agreed to acquire under the previously announced merger agreement between 21CF and Disney (the “Disney Merger Agreement”). This price represents a significant increase over the purchase price of approximately $28 per share included in the Disney Merger Agreement when it was announced in December 2017. The amended and restated Disney Merger Agreement offers a package of consideration, flexibility and deal certainty enhancements that is superior to the proposal made by the Comcast Corporation on June 13, 2018.

Under the amended and restated Disney Merger Agreement, Disney would acquire those businesses on substantially the same terms, except that, among other things, Disney’s offer allows 21CF stockholders to elect to receive their consideration, on a value equalized basis, in the form of cash or stock, subject to 50/50 proration. The collar on the stock consideration will ensure that 21st Century Fox shareholders will receive a number of Disney shares equal to $38 in value if the average Disney stock price at closing is between $93.53 and $114.32.

“We are extremely proud of the businesses we have built at 21st Century Fox, and firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace at a dynamic time for our industry,” said Rupert Murdoch, Executive Chairman of 21st Century Fox. “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.“

In light of the revised terms contained in the amended and restated Disney Merger Agreement, 21CF’s board, after consultation with its outside legal counsel and financial advisors, has not concluded that the unsolicited proposal it received on June 13, 2018, from Comcast could reasonably be expected to result in a “Company Superior Proposal” under the Disney Merger Agreement.

However, the amended and restated Disney Merger Agreement contains no changes to the provisions relating to the Company’s directors’ ability to evaluate a competing proposal.

As announced on May 30, 2018, 21CF has established a record date of May 29, 2018, and a meeting date of July 10, 2018, for a special meeting of its stockholders to, among other things, consider and vote on a proposal to adopt the Disney Merger Agreement. 21CF has determined to postpone its special meeting of stockholders to a future date in order to provide stockholders the opportunity to evaluate the terms of Disney’s revised proposal and other developments to date. Once 21CF determines the new date for 21CF’s special meeting of stockholders, the date will be communicated to 21CF stockholders.

One Thought to “Disney Raises Bid For Fox Properties”

  1. Aaron Morrow

    While my first reaction was to be wary about the theme parks getting squeezed to pay off the debt and goose the stock price, it doesn’t seem like “the market” is concerned about Disney overpaying for Fox right now.

    I’ll be more concerned when Comcast actually makes that bid, which some WSJ sources are saying could top $80 billion once finalized.

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