In December it was announced that The Walt Disney Company was in the process of acquiring most of 21st Century Fox for a reported $52.4 billion. As part of the acquisition, it was revealed that Comcast had a rejected bid that was 16 percent higher than Disney’s. In documents from the Securities and Exchange Commission it was finally revealed as to why Rupert Murdoch, the current owner of 21st Century Fox, chose Disney over Comcast.
A deal with Comcast initially was a strong consideration by Murdoch and the Fox board, as their offer was much higher than Disney’s, but when Comcast “repeatedly refused to agree to a breakup fee in case Department of Justice regulators rejected the deal” Fox and Murdoch began to lose interest. If Comcast had been granted the deal with Fox they wanted to dissociate with “any assets singled out by antitrust regulators as problematic.” With Comcast’s stipulations, Murdoch and Fox decided that Comcast “carried a qualitatively higher level of regulatory risk” as compared to Disney.
Another consideration for Murdoch and Fox’s board was the awareness that Disney’s stock was and is more valuable.
Credit: New York Times
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