FOX Agrees Merge With Disney After New $71 Billion Bid

Disney raises bid for 21st Century Fox assets to more than $70.3 billion

Disney chairman and chief executive Robert Iger said the acquisition of the 20th Century Fox studios and television assets in the U.S. and overseas would better position his company to compete in a media landscape being disrupted by big technology players.

According to CNN, Disney's new deal is both worth more, at $71 billion, and has a wrinkle that might make life harder for Comcast: Fox stockholders can either take Disney stock for their Fox shares, or just cash out completely.

Following the deal, Fox shareholders would own about 19% of the combined company, Disney's chief financial officer Christine McCarthy said on a conference call.

Under the revised offer, Disney is now offering $38 per Fox share for the assets, up from the previous 28%.

Just hours after Disney's increased bid for 20th Century Fox and other assets topped Comcast, a new report indicates more good news is on the way for the investors of the House of Mouse.

The tie-up "is an extremely compelling proposition for consumers that will allow us to create even more appealing high quality content, expand our direct to consumer offerings, an global presence and deliver more exciting and personalized entertainment experiences to meet the growing demands of consumers worldwide", Iger told a conference call.

Disney is locked in a battle with United States media conglomerate Comcast, which has offered $65bn in cash for Fox.




While few people tend to pick sides in the cases of mega mergers, the Disney and Fox case is different for fans of Marvel Studios and superhero movies. Elections of cash and stock will be subject to proration to the extent cash or stock is oversubscribed.

21st Century Fox is the next big prize as the media industry consolidates to survive against competitors such as Netflix and Facebook. That would lift the total transaction value above about $85-billion.

At stake is such Fox assets as FX Networks, National Geographic, a 30-percent stake in Hulu, a 31.9-percent stake in United Kingdom pay-TV and broadband provider Sky, and the 20th Century Fox film and television production studios, which include the movie rights for the X-Men, Fantastic Four and Deadpool, among other properties.

The Fox sale would not include major assets such as the Fox News Channel, Fox Business Network, and Fox Broadcasting Company. Like AT&T, Comcast is a content distributor that wants to buy a content creator. As a result of the acquisition, Disney will hold a controlling stake in Hulu.

In a call with analysts, Iger said he believes Disney's bid is superior to Comcast's from a regulatory perspective, and said that six months of dealing with regulators both in the US and internationally has given Disney a 'meaningful head start'. Both companies have spent the past six months working toward meeting all conditions necessary for closing. A July 10 Fox shareholder vote on the deal was postponed to a "future date" to allow more time to evaluate Disney's new offer "and other developments".

Fox appears to be reluctant to strike a deal with Comcast because of concerns about getting regulatory approval from the federal government.

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