Fox Shareholder Looks to Prevent Disney Acquisition; Files Lawsuit

Fox Shareholder Looks to Prevent Disney Acquisition; Files Lawsuit TWDC-Fox

On Friday in a Delaware federal court, Robert Weiss, a Fox shareholder, filed a lawsuit opposing Disney’s proposed purchase of the majority of 21st Century Fox.

The Walt Disney Company finalized the deal with Fox back in December which has the potential to reshape Hollywood as we know it. According to The Hollywood Reporter, executives at Fox believe “the company lacks the scale to compete in a digital age, and thus are aiming to get out of the film and TV industry and focus in on news.”

As we’ve previously reported, Disney found themselves facing unforeseen opposition when Comcast made an unsolicited bid on Fox. Regulators approved Disney’s purchase after only six months of deliberations.

“But not everybody is happy about the Disney proposal. According to THR, Weiss has filed a lawsuit in opposition to the deal. He argues that the company’s financial projections are inaccurate, particularly as regards Hulu and Sky, and that there’s an undeclared conflict of interest for Goldman Sachs and Centerview Partners, who performed the financial valuation analyses. The shareholder lawsuit complains that Disney and Fox have provided no forecasts for Hulu, or earnings estimates for the European broadcaster Sky.”

The merger’s inherent impact on the superhero genre has been the main focus of moviegoers. The likelihood of the X-Men and the Fantastic Four becoming a part of the Marvel Cinematic Universe (MCU) seems to have folks particularly excited, but there is a whole lot more at stake than just the MCU. If the deal goes through, Disney’s streaming service that’s set to launch in 2019 would become an instant competitor of Netflix and has the potential of dramatically reshaping Hollywood.

Analysts originally anticipated Hulu being a likely obstacle for the Department of Justice, but that wasn’t the case as the attention was focused on the potential impact of the deal on cable sports programming. Disney agreed to divest Fox’s 22 regional sports networks should the deal go ahead rather than argue the point which was sufficient enough for regulators to grant their approval. Fox shareholders are set to vote on whether or not the accept Disney’s most recent proposal on July 27.

Source: The Hollywood Reporter

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