Disney Responds to Comcast’s Bid for 21st Century Fox Assets with Significant Increase


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The Walt Disney Company has just raised its bid to purchase the majority of 21st Century Fox for $71.3 billion. This new bid amounts to $38 per share in cash and stock. Disney will also assume approximately $13.8 billion of net debt of 21st Century Fox. The acquisition price carries a total equity value of $71.3 billion giving the transaction a total value of approximately $85.1 billion (assuming no tax adjustment). Disney has secured financing for the cash portion of the acquisition.

In the release from 21st Century Fox, they state that they do not feel Comcast’s proposal could reasonably be expected to result in a “Company Superior Proposal” under the Disney Merger Agreement, so it appears that they’ve accepted Disney’s offer.

The shareholder meeting that was scheduled for July 10 has been postponed in light of the amended agreement. A new date for the shareholder meetings will be announced on a future date.

Below are excerpts from The Walt Disney Company’s release which shares details on each of the entities involved with the transaction.

As announced in the original acquisition agreement, the businesses to be acquired by Disney include 21st Century Fox’s film production businesses, including Twentieth Century Fox, Fox Searchlight Pictures and Fox 2000 Pictures; Fox‘s television creative units, Twentieth Century Fox Television, FX Productions and Fox21; FX Networks; National Geographic Partners; Fox Sports Regional Networks; Fox Networks Group International; Star India; and Fox’s interests in Hulu, Sky plc, and Tata Sky. The acquisition will occur immediately after the spin-off by 21st Century Fox of the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company referred to as New Fox. If 21st Century Fox completes its acquisition of the 61% of Sky it doesn’t already own prior to closing of the Disney acquisition, Disney would assume full ownership of Sky, including the assumption of its outstanding debt, upon closing.



The acquisition will significantly increase Disney’s international 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. As a result of the acquisition, Disney will hold a controlling stake in Hulu.

The following is the official release from Twenty-First Century Fox:

Twenty-First Century Fox announced today that it has entered into an amended and restated merger agreement with The Walt Disney Company 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.




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