Disney’s $71.3 Billion Takeover of 21st Century Fox Almost Complete

The latest from 21st Century Fox is that they have agreed to Disney’s $71.3 billion counterbid aimed to outdo Comcast’s offer to purchase the company. Disney improved their bid for a majority stake in 21st Century Fox’s film and television assets last Wednesday.

Rupert Murdoch, who owns about 17 percent voting shares together with his family is likely to be the largest beneficiary of the new cash-or-stock deal. At present, the Murdochs are facing a large capital gains tax bill under Comcast’s all-cash offer. Initially, Disney’s offer was purely stock-centric.

Disney beat Comcast’s $65 billion offer in what Fox’s board of directors have come to describe as being the “superior” bid

After Comcast’s bid that trounced Disney’s original December offer of $52.5 billion, many in the know had long expected Disney to come back with a counteroffer. Before Disney’s latest offer of $38 per share in half cash and half stock; Comcast’s offer was purely cash.

Notably, following Disney’s revised $38 a share offer, which is set to be split 50-50 in cash and stock. the managed to record a $10 higher bid compared to their first one. Comcast’s bid was set at $35 a share in cash. With Disney set to take on about $13.8 billion of Fox’s net debt, this implies that there will be a total transaction value of about $85.1 billion.

A source communicated to reporters and informed them that Disney would submit their bid prior to Fox’s board meeting in London. Some of the assets being sold by Fox include National Geographic, film and television studios, Fox’s stake in British broadcaster Sky, a 30 percent stake in popular video website Hulu and Indian network star.

Race Against Time

The deal came just a day after Disney agreed to buy Sky News, in a bid to hasten Fox’s attempted takeover of Sky in the UK

Experts believe that both Disney and Comcast are desperate to take up Fox’s entertainment businesses in order to bolster their defences against rising tech giants Netflix and Amazon which have made forays into television and film production.

Speaking to members of the press, Rupert Murdoch, the Executive Chairman of 21st Century Fox, mentioned that they were extremely proud of the business they had built at 21st Century Fox. He further added that their latest collaboration with Disney would be greatly beneficial since it will enable them to unlock more value for shareholders as Disney continually seeks to set the pace of a dynamic time in their industry.

Murdoch expressed his optimism that the combination of 21st Century Fox’s iconic assets, franchises, and brands with Disney will become one of the greatest and most innovative companies in the world. Remarkably, Murdoch and Disney’s Chief Executive Officer Bob Iger are said to have discussed the tie-up last autumn over a wine session at Murdoch’s estate in Bel-Air, LA.

Following Disney’s latest move, Comcast currently faces a hurdle in deciding whether they still consider the venture as feasible in before readying a higher bid. Numerous analysts and investors are said to be expecting a counterbid from Comcast. The U.S. cable company and owner of NBC Universal is based in Philadephia. Comcast representatives did not get back to reporters for comment on the matter.

Reports

One Bloomberg source went on record to say that Disney was on the verge of winning US antitrust approval for their deal with the Justice Department. Reportedly, the Justice Department will swiftly approve of the deal within a fortnight

Iger had earlier on dismissed any antitrust concerns in a deal and mentioned that the had been working with other regulators world over in the last half-year. He further added that Fox’s programming would help ensure that the Disney-branded streaming service is able to compete with Netflix in 2019.

Ketan Jhaveri, a former Justice Department attorney who’s served in the telecommunications task force for internet policy believes that Comcast could face tougher regulatory scrutiny if the deal involves the possible transfer of television licenses. He shared that such a move would likely trigger a Federal Communications Commission review.