Takeover battle: Disney/Fox reach $71B deal, blowing away Comcast

Gladys Abbott
June 20, 2018

Disney said it would now pay $38 per share for Fox, up from its initial bid of $28 per share.

Diversified Private Wealth Advisors President Dominick Tavella and Rosecliff CEO Mike Murphy on Comcast's bid challenging Disney's deal to acquire 21st Century Fox' entertainment assets and the outlook for Federal Reserve policy.

The announcement comes as Comcast had made it clear that it would like the Fox assets to expand globally and add to its content library - the same aims as Disney. Even though a federal judge resoundingly defeated the government's lawsuit seeking to block the vertical merger of AT&T and Time Warner, the Disney CEO said he still believes a more vertical blend of Comcast (whose holdings include the No. 1 USA cable system) and Fox would face scrutiny.

Disney's latest offer is a "very aggressive move" by Chief Executive Officer Bob Iger and may make it hard for Comcast to respond, said Bloomberg Intelligence analyst Paul Sweeney.

That's more than the $65 billion Comcast (CMCSA) offered a week ago. In morning trading, shares of Twenty-First Century Fox rallied 6 percent to $47.47.

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It looks like Fox is one step closer to completing the sale of its assets, as the company has officially accepted the latest, and largest offer from Disney. In a statement Wednesday Disney said it is raising its offer because Fox's value increased due to "tax reform and operating improvements".

The deal would include Fox film and TV studios, some cable networks and global assets, but not Fox News Channel or the Fox television network. The deal would be about 50% cash and 50% stock, and debt would be used to partly finance the transaction.

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

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.

The tussle follows AT&T Inc.'s victory over the U.S. Justice Department in its antitrust battle to take over Time Warner Inc. It can't really be said that Comcast would have really done anything good with them, so we will just have to wait and see how this pans out - as Comcast could still make a higher offer.

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