Published: Wed, June 20, 2018
Business | By Kate Woods

Fox agrees to £54bn bid from Disney in blow to Comcast

Fox agrees to £54bn bid from Disney in blow to Comcast

Rupert Murdoch, executive chairman of 21st Century Fox, said Fox believes Disney's offer is better than Comcast's - but the company said it would consider bids from other companies, including a revised offer from Comcast.

Although there's been talking that the "most sensible outcome" would be for Disney and Comcast to "split the baby", the former may forego said option, opting to add cash to their initial all-stock offer instead, at least according to the latest from CNBC.

Disney is making a $70.3 billion counterbid for Fox's entertainment businesses following Comcast's $65 billion offer for the company.

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Shares of 21st Century Fox were up 6% on the news, while Disney's were up 2.2%. Fox will have to pay Disney a $1.5 billion breakup fee if it backs out of that deal.

Comcast, which has lodged a separate £22bn bid to buy Sky, is expected to respond with a sweeter deal as a bidding war hots up over the summer. It did not mention Comcast's bid.

In light of the new Disney offer, Fox has reportedly not concluded that the June offer from Comcast would count as a "superior proposal", as per the existing merger agreement with Disney, but the new amended offer still allows the Fox board of directors to evaluate a new competing proposal. AT&T just bought Time Warner for $81 billion, after a federal judge rejected the government's antitrust concerns.

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Disney, meanwhile, could also benefit from Fox's wide range of television and film assets, which could feed into its streaming services, including a planned rival to Netflix sometimes referred to as Disneyflix. Shares of Disney rose 29 cents to $106.47 and Comcast shares rose 22 cents to $33.03 Dollars.

This boils down to $38 per share in cash and stock, with Disney taking on $13.8B of Fox's net debt, which would increase the total transaction to $85.1B. "Investors have been speculating that they could bid as high as $43-45".

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