Published: Wed, June 20, 2018
Money | By Wilma Wheeler

Disney making $70.3 billion counterbid for Twenty-First Century Fox

Disney making $70.3 billion counterbid for Twenty-First Century Fox

It's not a one-to-one split: Roughly every four Fox shares would get you one Disney share. In December, Disney had offered $52.4 billion in stock.

Both Comcast and Disney are keen to buy Fox's entertainment assets, including Sky, in order to acquire film and television content that would enable them to compete more effectively with digital giants, like Netflix and Amazon, who sell their content directly to viewers. Comcast, which had proposed to pay $35 per share, declined to comment on Disney's freshened offer. "Direct-to-consumer distribution has become an even more compelling proposition in the six months since we announced the deal".

The 21st Century Fox logo is displayed outside the News Corporation building in the Manhattan borough of New York City, New York, U.S., June 15, 2018.

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.

The deal does not include Fox News, the Fox broadcast network, television stations, Fox Sports 1 and Fox Sports 2. "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". This doesn't mean that Fox is now selling to Disney for $71.3 billion and everything is a done deal.

A US court's recent approval of AT&T's merger with Time Warner raised the likelihood that Comcast's similar proposed deal with Fox would get the green light from regulators, according to analysts.

"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", Murdoch, the executive chairman of Fox, said.

The tie-up "is an extremely compelling proposition for consumers that will allow us to create even more appealing high quality content, expand our direct to consumer offerings, an global presence and deliver more exciting and personalized entertainment experiences to meet the growing demands of consumers worldwide", Iger told a conference call. 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). So just how high can the bidding war go?

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