21st Century Fox has agreed a new takeover offer from Disney, adding a cash element to the originally all-stock deal and beating the rival bid from Comcast. Under the amended agreement, Fox shareholders will receive USD 38 per share, in a choice of cash or stock, with a maximum 50 percent of the total price in cash for Disney. The total equity price of USD 71.3 billion tops Comcast's offer of USD 65 billion for Fox and Disney's first offer of USD 52.4 billion all in stock.
The assets in the takeover remain the same as Disney's original agreement, and the company noted that the value of the assets had increased since the deal was first announced in December 2017, due the US corporate tax reform and operating improvements. Prior to the acquisition, Fox will spin off the Fox Broadcasting network and stations in the US, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company referred to as New Fox.
If Fox completes its acquisition of the 61 percent of Sky it doesn’t already own prior to closing of the Disney acquisition, Disney would assume full ownership of Sky upon closing. Disney also acquires the film production businesses, including Twentieth Century Fox, Fox Searchlight Pictures and Fox 2000 Pictures; Fox‘s television creative units, Twentieth Century Fox Television, FX Productions and Fox21; FX Networks; National Geographic Partners; Fox Sports Regional Networks; Fox Networks Group International; Star India; and Fox’s interests in Hulu and Tata Sky. The company maintained its forecast for at least USD 2 billion in cost synergies by 2021 from integrating the Fox assets.
Regulatory approval close
Disney said the transaction "has a clear and timely path to regulatory approval", as both companies have spent the past six months working toward meeting all the conditions necessary for closing. In the amended agreement, Disney said it also increased the scope of its commitment to take actions required to secure regulatory approval. Bloomberg reported separately that the US Department of Justice is close to granting anti-trust clearance for the deal. Its sources said the approval could come in as soon as two weeks, and Disney has agreed to sell some assets to avoid competition concerns.
Fox said the new deal with Disney could be considered a superior proposal to Comcast's offer. However, there were no changes in the terms of its agreement with Disney that would prevent the Fox board from considering alternative offers.
In light of the new agreement, the planned shareholders meetings on the takeover for 10 July will be delayed, while the companies send out new materials to stockholders.
