Published: Wed, June 20, 2018
Life&Culture | By Rose Hansen

Disney Ups Fox Bid to $71.3 Billion, Outflanking Comcast

Disney Ups Fox Bid to $71.3 Billion, Outflanking Comcast

While Fox's board has yet to make a decision, analysts and industry dealmakers widely expect Fox to say that Comcast's bid could potentially lead to a better deal for its shareholders. This would be the time for Fox to learn more about Comcast's commitments when it comes to regulatory approval, for example.

FILE PHOTO: The Twenty-First Century Fox Studios flag flies over the company building in Los Angeles, California U.S. November 6, 2017. 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 US cable system) and Fox would face scrutiny.

Disney could sweeten its all-stock bid with cash, given its strong balance sheet and the potential boost to earnings per share, according to the people familiar with the matter. The situation is fluid, and the Fox board's thinking could change, the people said.

In a statement last week, Fox said that it would "carefully review" Comcast's unsolicited proposal.

Trump threatens extra tariffs on US$200b of Chinese goods
In April , the Trump administration outlined around 1,300 products worth $50 billion that would be hit with proposed tariffs. It could also be that he thinks China will run out of United States imports against which to retaliate.

If it does, Fox would then be allowed to negotiate with Comcast and take a closer look at its offer.

Directors can either begin that process by declaring on Wednesday that Comcast's proposal has a reasonable chance of becoming a superior offer, or they can simply ask Disney for a waiver to begin conversations with Comcast. But it comes with one key change created to stave off Comcast's all-cash offer: a provision that allows Fox shareholders to decide whether to accept their payment in cash or stock. Disney committed to giving Fox shareholders Disney shares worth $38, as long as Disney's average stock price remains between $93.53 and $114.32.

The acquisition will significantly increase Disney's global footprint and expand the content and distribution for its direct-to-consumer (DTC) offerings, which include ESPN+ for sports fans; a Disney-branded streaming video-on-demand service launching in late 2019 that will feature Disney, Pixar, Marvel and Star Wars films along with a host of exclusive original content and library titles; and its ownership stake in Hulu.

Fox postponed a shareholder meeting that had been scheduled for July 10.

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