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

Daniel Fowler
June 20, 2018

Last week, the proposed acquisition of 21st Century Fox by The Walt Disney Company undoubtedly took its biggest hit yet when Comcast tabled a $65 billion all-cash bid for the Rupert Murdoch-founded company.

Disney said it expects to pay a total of about $35.7bn in cash and issue 343 million new shares to Fox shareholders, representing about a 19% stake in Disney, with the deal valued at $71.3bn.

Shares of 21st Century Fox were up 6% on the news, while Disney's were up 2.2%.

Disney and Comcast are battling to win Fox's movie and television studios at a time when legacy media and distribution companies are looking to expand to better compete with younger media firms like Netflix that sell their content directly to viewers, according to Reuters. The previous agreement was an all-stock deal, and Comcast's cash offer was seen as a significant enticement. Disney committed to giving Fox shareholders Disney shares worth $38, as long as Disney's average stock price remains between $93.53 and $114.32.

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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.

Diversified Private Wealth Advisors President Dominick Tavella and Rosecliff CEO Mike Murphy on Comcast's bid challenging Disney's deal to acquire 21st Century Fox' entertainment assets and the outlook for Federal Reserve policy.

Back in December, Disney agreed to snap up 21st Century Fox for $52.4B, however, recently Comcast officially put in a bid for $65B for the same entertainment assets.

The deal would include Fox film and TV studios, some cable networks and worldwide assets, but not Fox News Channel or the Fox television network. "We remain convinced that the combination of 21CF's iconic assets, brands and franchises with Disney's will create one of the greatest, most innovative companies in the world", he said in a statement.

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