Fox board to meet on Comcast's $65B bid

21st Century Fox

IT'S A BIDDING WAR: Disney boosts its offer for 21st Century Fox assets to $71. 3 billion

While Fox's board has yet to make a decision, analysts and industry dealmakers widely expect Fox to say that Comcast's bid could potentially lead to a better deal for its shareholders.

The bidding war, however, may not be over just yet.

Disney could sweeten its all-stock bid with cash, given its strong balance sheet and the potential boost to earnings per share, according to the people familiar with the matter. The battle for Twenty-First Century Fox reflects a new imperative among entertainment and telecommunications firms.

Disney will also now control the rights to such current Fox cinematic franchises as Avatar, Planet of the Apes, Alien, Predator, Die Hard, Kingsman, Ice Age and Night at the Museum. The situation is fluid, and the Fox board's thinking could change, the people said.

Comcast had no immediate comment. "You at least need to do some kind of review process", he said.

Directors can either begin that process by declaring on Wednesday that Comcast's proposal has a reasonable chance of becoming a superior offer, or they can simply ask Disney for a waiver to begin conversations with Comcast.

A USA court's recent approval of AT&T's merger with Time Warner raised the likelihood that Comcast's similar proposed deal with Fox would get the green light from regulators, according to analysts.

Craig Moffett, an analyst at Moffett Nathanson, said that the Justice Department never addressed the question of whether internet providers such as Comcast could give an advantage to its own content at the expense of competitors.

Disney is expected to pay a total of approximately $35.7 billion in cash and issue approximately 343 million new shares to 21st Century Fox shareholders, representing about a 19% stake in Disney on a pro forma basis.

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

Also at stake is the ownership of streaming service Hulu.

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