Shareholders Approve Disney’s $71.3B Acquisition of Fox as Deal Enters Final Stages

One week after Comcast officially bowed out of the bidding war for 21st Century Fox's entertainment assets by ceding to Disney, shareholders of both Fox and Disney have today approved Disney's $71.3 billion acquisition offer for Fox (via The Wall Street Journal).

At two separate gatherings this morning in Manhattan, both company's shareholders were said to have "voiced their support" for the acquisition in brief meetings that lasted less than 15 minutes.


There are still a few hurdles before Disney officially acquires 21st Century Fox's entertainment assets, mostly related to approval from overseas entities. Specifically, Disney is waiting for the European Union and China to grant approval for the acquisition, as well as "more than a dozen" other international territories.

Still, with the United States Justice Department approving the acquisition last month (with one condition for Disney) and now the shareholders voting to approve, it's believed Disney's acquisition of Fox will be done by early 2019.

News of Disney's interest in Fox dates back to last December when Disney initially announced its bid to acquire Fox for $52.4 billion in stock. Comcast entered with its own $65 million cash offer for Fox's assets, leading to Disney's increased $71.3 billion cash and stock bid in June. At the time that it bowed out of the running for Fox, Comcast CEO Brian L. Roberts congratulated Disney and its CEO Bob Iger and commended the Murdoch family and Fox "for creating such a desirable and respected company."

Disney's plans for Fox line up with its intent to launch a streaming service in late 2019, showcasing a lineup of content from Walt Disney Animation Studios, Marvel, Pixar, Star Wars, and likely a back catalog of films and TV shows owned by Fox, further enticing customers to sign up. Under the agreement Disney will acquire Fox assets including Twentieth Century Fox Film and Television Studios, Fox-related cable and international TV businesses, Fox's 30 percent stake in Hulu, the film rights to the X-Men and Avatar franchises, and more.

Disney has already launched its first streaming service in the form of ESPN+ this past spring, granting subscribers access to live sports, original shows and films, studio programs, and an on-demand library of content. Ahead of the debut of its main streaming service a little of a year from now, Disney has warned Netflix users that it will begin removing its TV shows and films from Netflix before its own platform launches.

New Disney-owned movies have still appeared on Netflix at a decent rate this year -- including Star Wars: The Last Jedi, Coco, and Thor: Ragnarok -- but a few have begun to disappear, including the impending removal of Pixar's Finding Dory in August.

A Disney streaming service filled with Fox content will be a direct competitor to Apple's upcoming streaming service, also believed to see a launch at some point in 2019. Apple's partners in the original TV content space include Oprah Winfrey, M. Night Shyamalan, J.J. Abrams, Kumail Nanjiani, and more.

Tags: Disney, Fox

Discuss this article in our forums

Comcast Bows Out of Competition for Fox, CEO Congratulates Disney as Bidding War Ends

After a summer of back-and-forth bids between Comcast and Disney for select entertainment assets owned by 21st Century Fox, Comcast today confirmed that it is bowing out of the bidding war for Fox. The company says the move is to instead focus on acquiring European satellite TV provider Sky, another much-sought-after entertainment company that is seeing interest from the likes of Comcast, Fox, and Disney (via Variety).


For the purchase of 21st Century Fox, this means that Disney is now expected to finally win the bid and close out the acquisition deal in the near future. The most recent steps in that process saw Disney and Fox agree to a $71.3 billion cash and stock deal, which has now also been approved by the Department of Justice on the condition that Disney sells off 22 regional Fox sports networks.

In the announcement confirming that it will not place another bid on Fox, Comcast CEO Brian L. Roberts congratulated Disney and its CEO Bob Iger:
“Comcast does not intend to pursue further the acquisition of the Twenty-First Century Fox assets and, instead, will focus on our recommended offer for Sky,” the company said in a statement Thursday.

Brian L. Roberts, Comcast chairman-CEO, added: “I’d like to congratulate Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company.”
Disney originally announced interest in acquiring 21st Century Fox last December, starting its bidding at $52.4 billion in stock before Comcast forced it to increase the amount and introduce a cash component. Once the acquisition is final, Disney will own Twentieth Century Fox Film and Television Studios and Fox-related cable and international TV businesses.

At the time, Disney leadership said that the new Fox assets will build on the company's "commitment to deliver the highest quality branded entertainment," as well as fuel its ability to "create more appealing content." The company also referenced its intent to deliver a "more compelling" entertainment experience to Disney consumers "whenever and however" they choose.

Disney said that the Fox assets would accelerate its use of certain technologies, including the recently acquired BAMTech platform, which it aims to use for its solo-streaming service. With the acquisition, Disney will immediately gain a large stable of old and new television shows and movies to populate its upcoming streaming service, expected to launch in 2019 and compete with Apple's own streaming TV service.


Discuss this article in our forums

Disney’s Acquisition of Fox Approved, but Must Sell Off 22 Regional Fox Sports Networks

After months of scrutiny in an ongoing antitrust case, the United States Department of Justice today granted The Walt Disney Company approval to acquire 21st Century Fox's entertainment assets for $71.3 billion, on one new condition: Disney must divest 22 regional sports networks owned by Fox to an "acceptable" buyer. Removing these networks from the acquisition "would resolve the competitive harm" that has been previously raised in the antitrust lawsuit, the Department said.


If Disney did acquire Fox and the 22 regional sports networks, the original complaint argued that the proposed acquisition would "likely result" in multichannel video programming distributors paying higher prices for cable sports programming in the designated markets. This would also inflate television subscription prices in the process, the Department pointed out.

Now, Disney has agreed to sell the 22 networks to a buyer that the Justice Department deems "acceptable," rather than continue the ongoing merger investigation. After the acquisition closes, Disney will have 90 days in which to sell all of the designated networks to the buyer, otherwise the court will appoint a trustee to force the sale.

This will ensure a competitive market remains in place in each region, Assistant Attorney General Makan Delrahim explained.
“American consumers have benefitted from head-to-head competition between Disney and Fox’s cable sports programming that ultimately has prevented cable television subscription prices from rising even higher,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “Today’s settlement will ensure that sports programming competition is preserved in the local markets where Disney and Fox compete for cable and satellite distribution.”
The specific regional sports networks in question include the following:

(i) Fox Sports Arizona, (ii) Fox Sports Carolinas, (iii) Fox Sports Detroit, (iv) Fox Sports Florida, (v) Fox Sports Indiana, (vi) Fox Sports Kansas City, (vii) Fox Sports Midwest, (viii) Fox Sports New Orleans, (ix) Fox Sports North, (x) Fox Sports Ohio, (xi) SportsTime Ohio, (xii) Fox Sports Oklahoma, (xiii) Fox Sports San Diego, (xiv) Fox Sports South, (xv) Fox Sports Southeast, (xvi) Fox Sports Southwest, (xvii) Fox Sports Sun, (xviii) Fox Sports Tennessee, (xix) Fox Sports West, (xx) Prime Ticket, (xxi) Fox Sports Wisconsin, and (xxii) the YES Network.
Disney is now believed to have surpassed the last major hurdle in the deal and should be nearing the end of the acquisition process, although regulatory approvals from other countries are still required. Competitive offers could also still appear, potentially from Comcast, although Fox has remained vocal about its preference for Disney to win its entertainment assets.

As outlined in the original announcement last December, these assets include Twentieth Century Fox Film and Television Studios and Fox-related cable and international TV businesses. Movie assets that would become Disney-owned include Avatar, X-Men, Fantastic Four, and Deadpool, and TV shows include The Simpsons, This Is Us, and The Americans. Disney would also get Fox's 30 percent stake in Hulu and become a majority owner of the streaming service.

Tags: Disney, Fox

Discuss this article in our forums

Disney Outbids Comcast for Fox’s Assets With $71.3 Billion Cash and Stock Deal

21st Century Fox and the Walt Disney Company today announced a new deal that increases the value of Disney's original December 2017 offer from $28 a share at $52.4 billion to $38 a share at $71.3 billion, with a new cash component. This agreement "is superior to the proposal" from Comcast made earlier this month, according to an unnamed representative speaking for Fox (via The Wall Street Journal).


Additionally, the new Fox-Disney deal states that Fox shareholders will be able to receive their consideration "in the form of cash or stock," subject to 50/50 proration. The updated deal comes six months after Disney first announced its intent to acquire certain parts of 21st Century Fox, including Twentieth Century Fox Film and Television Studios, Fox-related cable and international TV businesses, and Fox's 30 percent stake in Hulu, among other assets.

Comcast entered as a competitor earlier in June at $35 per share for a total of $65 billion -- an offer that Disney has now beat. Fox has mentioned in the past that talks with Disney were more advanced than any other potential buyer, and it appears that the two companies are trying to work out a deal that values Fox's assets in the wake of Comcast's increased bid.

Nothing is finalized yet, however, and if shareholders are thought to be favoring a cash-heavy deal, people familiar with the matter told WSJ that Disney is "in position to inject cash into its offer."
Some Fox shareholders might prefer a premium cash offer like the one Comcast is offering, even though the capital gains would be taxable. Other shareholders, particularly the large institutional shareholders that are Fox’s biggest investors, tend to care much less about taxes, Mr. Willens added.
With either company, the deal will have to face regulatory hurdles and get approved by the Justice Department. However, Comcast waited to make its bid on Fox until a U.S. District Court Judge approved of the merger between AT&T and Time Warner, which set a precedent for similar cases. According to Comcast, the court's approval should "nullify" any of Fox's regulatory concerns, which is the reason Fox rejected Comcast's original offer in April 2018.


Discuss this article in our forums

Comcast Outbids Disney for Fox’s Assets With $65 Billion All-Cash Offer

Just a day after a U.S. District Judge approved the upcoming merger between AT&T and Time Warner, Comcast has submitted a bid for 21st Century Fox's TV and film assets, reports CNBC.

Comcast has presented Fox with an all-cash offer at $35 per share for a total of $65 billion, which beats out Disney's stock-based $52.4 billion deal. 21st Century Fox has already moved forward on a deal with Disney, but Comcast is aiming to change the minds of Fox's board members. From the letter sent to Fox's board by Brian Roberts, Comcast CEO.

So, we were disappointed when 21CF decided to enter into a transaction with The Walt Disney Company, even though we had offered a meaningfully higher price. We have reviewed the publicly available terms of the proposed Disney transaction, as well as the joint proxy statement/prospectus filed with the SEC describing the reasons for the 21CF Board of Directors' decision.

In light of yesterday's decision in the AT&T/Time Warner case, the limited time prior to your shareholders' meeting, and our strong continued interest, we are pleased to present a new, all-cash proposal that fully addresses the Board's stated concerns with our prior proposal.

Our new proposal offers 21CF shareholders $35.00 per share in cash and 100% of the shares of New Fox after giving effect to its proposed spinoff, providing superior and more certain value as compared to Disney's all-stock offer.
Comcast first announced its plans to make a bid on 20th Century Fox, 20th Century Fox Television, several Fox-owned cable channels, and a stake in Hulu back in May, but the company was waiting on a final antitrust ruling in the AT&T/Time Warner merger. It was believed that if the ruling had not been in AT&T's favor, that Comcast would have backed off of its efforts to outbid Disney.

Both Disney and Comcast are interested in Fox's assets to expand their reach beyond the United States and to stock their streaming catalogs with Fox content, which includes movies like Avatar, X-Men, Fantastic Four, Deadpool, The Grand Budapest Hotel, Titanic, Miracle on 34th Street, The Shape of Water, and Gone Girl.


Discuss this article in our forums

21st Century Fox CEO Says Apple Still Just ‘Dabbling’ in Original TV Content

In early 2017, Apple CEO Tim Cook described the company's plans for original TV content on Apple Music as placing a "toe in the water" for its television ambitions at the time. Eventually, Planet of the Apps and Carpool Karaoke debuted on the service, but since then frequent reports have indicated Apple is now "completely all in" on original content, shifting from reality TV programs on Apple Music to high-quality, $1 billion investments in hour-long programs on par with shows like Westworld.

Despite Apple's evolving plans over the past year and a half, 21st Century Fox CEO James Murdoch still believes Apple to be "dabbling" in the creative original content space. In an interview at Recode's Code Conference this week, Murdoch was asked what advice he would give to companies who are not traditional TV content-creating companies, but who are getting into the original programming business.

Photo taken by Asa Mathat via Recode

Murdoch explained that 21st Century Fox's angle is "a creative business" and "very entreprenurial," where it empowers creators, creative partners, and creative executives to "push the envelope" in storytelling. He said that "being tolerant of failure is important," leading into his statement about Apple and other companies looking into TV production and their potential fear of failure as an impediment to faster progress.
So, I think the one issue that we see with the kind of, you know, the dabbling, right? If you look at an Apple. Is it ... Going piece by piece, one by one, show by show, et cetera, is gonna take a long time to really move the dial and having something mega. I do think that’s gonna be very challenging.
As of now, there are 13 original shows coming from Apple (although how exactly they will launch remains in question), including new episodes of Amazing Stories, an untitled space drama from the creator of the Battlestar Galactica reboot, a Kristen Wiig sitcom, and other projects from names like Damien Chazelle, M. Night Shyamalan, and Octavia Spencer. Apple has set aside a $1 billion "war chest" for the production of these shows, the first of which could launch as soon as March 2019.

Murdoch appears to think that Apple will roll out its shows "one by one," leading into his argument that it will take a while for the company to have a hit on its hands. It's unclear why the CEO believes that to be Apple's plans, however, since neither Apple nor any rumors have suggested how exactly the company will launch its shows, and how many will hit at once.


One of Apple's rivals in the market will be Hulu, which has its own original TV shows like The Handmaid's Tale, Marvel's Runaways, and the upcoming Stephen King anthology series Castle Rock. 21st Century Fox is one of the owners of Hulu, and according to Murdoch about half of the 20 million Hulu subscribers pay for the service's $11.99/month No Commercials tier, upgrading from the Limited Commercials option at $7.99/month.
There’s an option for the limited-ad experience, and it’s about evens, I think.

I think they say, “You know, for four bucks, I’m getting a limited ad ... Four bucks extra, I can do it this. For four bucks less a month, I’ll have limited ads. It’s not a terrible experience, the ads, it’s a much lighter load than you see in broadcast or cable generally.”

So, I think they make a choice. And I think once you empower the customer, and you make it really transparent, that it’s really about how they’re valuing their time, and how they’re valuing and dealing with their priorities, then also they complain a lot less about the ads, because they’ve been given a choice and empowered. So a lot of, I think, what the whole industry is doing is trying to figure this out.
Murdoch also touched upon the company's plans to sell parts of its media assets to Disney, which now could be complicated with an all-cash offer from Comcast. The CEO was expectedly reserved about specific details regarding what could happen with each offer, but made it clear that the company has given far more thought to the regulatory aspects of the Disney deal than it has to any offer from Comcast, saying Fox will "deal with that as we go."


Discuss this article in our forums

Comcast Confirms Plans to Outbid Disney for Fox’s Assets With ‘Superior’ All-Cash Offer

Last December, The Walt Disney Company outlined plans to acquire 21st Century Fox and a collection of its subsidiaries for $52.4 billion in stock. Those plans have been under regulatory scrutiny for months and have yet to be finalized, and now Comcast has confirmed it is in "advanced stages" of sending Fox a "superior" all-cash offer in hopes of besting Disney's all-share offer (via Bloomberg).

Previous reports about Comcast's potential bid also referenced an all-cash deal, and put an estimate above Disney's to as much as $60 billion in cash from Comcast for the designated Fox assets. Comcast's press release today does not disclose an offer amount, but the company says the structure and terms of any offer would be "at least as favorable to Fox shareholders as the Disney offer."


Comcast says that its work to finance the offer for some of Fox's assets is "well advanced," and the company has already prepared to file key regulatory statements. Of course, no final decision has yet been made, but analyst Daniel Ives notes that, "If Comcast won these assets from the arms of Disney, it would be a devastating blow to [Disney CEO] Bob Iger."
In view of the recent filings with the U.S. Securities and Exchange Commission by The Walt Disney Company (“Disney”) and Twenty-First Century Fox, Inc. (“Fox”) in preparation for their upcoming shareholder meetings to consider the acquisition of Fox by Disney, Comcast Corporation (“Comcast”) confirms that it is considering, and is in advanced stages of preparing, an offer for the businesses that Fox has agreed to sell to Disney (which do not include the Fox News Channel, Fox Business Network, Fox Broadcasting Company and certain other assets).

Any offer for Fox would be all-cash and at a premium to the value of the current all-share offer from Disney. The structure and terms of any offer by Comcast, including with respect to both the spin-off of “New Fox” and the regulatory risk provisions and the related termination fee, would be at least as favorable to Fox shareholders as the Disney offer.
As of now, recent reports have stated that the Comcast/Fox offer's final fate may rely on the government's decision regarding AT&T's acquisition of Time Warner. Similar to AT&T owning DirecTV, Comcast owns NBCUniversal, and both companies are looking into purchasing large TV programming entities.

Because of this, it's believed Comcast will take a wait-and-see approach, and if a U.S. judge rules against AT&T on antitrust grounds in a trial coming next month, Comcast is expected to back off of Fox's assets. If AT&T wins the case and Comcast moves forward with a bid, Bloomberg Intelligence analyst Paul Sweeney says the Disney vs. Comcast bidding war would be intense: "Disney is likely to put up quite a fight."

Disney and Comcast are looking at Fox's entertainment assets in hopes of expanding their reach outside of the United States, as well as stocking their streaming back catalogs with a quick rush of content. Movie assets that either company could gain from 21st Century Fox include Fox Searchlight Pictures and Fox 2000, homes of movies like Avatar, X-Men, Fantastic Four, Deadpool, The Grand Budapest Hotel, The Shape of Water, and Gone Girl.

For TV shows, Fox's TV production companies include Twentieth Century Fox Television, as well as FX Productions and Fox21, which bring viewers shows like The Simpsons, This Is Us, and The Americans. Notably, the winning bidder would gain Fox's 30 percent stake in Hulu, and if Disney acquires the company it would become a majority shareholder of the streaming service.


Discuss this article in our forums

The Walt Disney Company Has Acquired 21st Century Fox Assets and Now Has Majority Control Over Hulu

Following weeks of news coverage about the potential acquisition of certain Fox assets by The Walt Disney Company, today the confirmation of that acquisition has come from Disney with a press release detailing the specific parts of Fox that will now merge into Disney. Notably, Disney has acquired 21st Century Fox, including Twentieth Century Fox Film and Television Studios and Fox-related cable and international TV businesses, for $52.4 billion in stock.

Movie assets that are now Disney-owned under 21st Century Fox include Fox Searchlight Pictures and Fox 2000, homes of movies like Avatar, X-Men, Fantastic Four, Deadpool, The Grand Budapest Hotel, The Shape of Water, and Gone Girl. Disney also now owns Fox's TV production companies including the previously mentioned Twentieth Century Fox Television, as well as FX Productions and Fox21, which brought viewers shows like The Simpsons, This Is Us, and The Americans.


On the TV network and streaming side of things, Disney has also acquired FX Networks, National Geographic Partners, Fox Sports Regional Networks, Fox Networks Group International, Star India, Sky plc, Tata Sky, Endemol Shine Group, and most notably Fox's 30 percent stake in Hulu. With this particular asset acquisition, Disney is now a majority shareholder of Hulu.
“The acquisition of this stellar collection of businesses from 21st Century Fox reflects the increasing consumer demand for a rich diversity of entertainment experiences that are more compelling, accessible and convenient than ever before,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company.

“We’re honored and grateful that Rupert Murdoch has entrusted us with the future of businesses he spent a lifetime building, and we’re excited about this extraordinary opportunity to significantly increase our portfolio of well-loved franchises and branded content to greatly enhance our growing direct-to-consumer offerings. The deal will also substantially expand our international reach, allowing us to offer world-class storytelling and innovative distribution platforms to more consumers in key markets around the world.”
According to Disney, all of these new assets will build on the company's "commitment to deliver the highest quality branded entertainment," as well as fuel Disney's ability to "create more appealing content." The company also references its intent to deliver a "more compelling" entertainment experience to Disney consumers "whenever and however" they choose.

Specifically, Disney said that the Fox assets will even accelerate its use of certain technologies, including the recently acquired BAMTech platform, which it aims to use for its solo-streaming service. The company said these advancements will create more ways for Disney storytellers to share content with audiences, while providing those audiences more choices for how they consume film and TV.

For these reasons, the company said that the newly announced Disney streaming service, ESPN service, and Hulu will all benefit from the Fox acquisition.
Bringing on board 21st Century Fox’s entertainment content and capabilities, along with its broad international footprint and a world-class team of managers and storytellers, will allow Disney to further its efforts to provide a more compelling entertainment experience through its direct-to-consumer (DTC) offerings. This transaction will enable Disney’s recently announced Disney and ESPN-branded DTC offerings, as well as Hulu, to create more appealing and engaging experiences, delivering content, entertainment and sports to consumers around the world wherever and however they want to enjoy it.
Important assets being left out of the deal and staying with Fox include the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2, and Big Ten Network. Immediately prior to the acquisition 21st Century Fox separated all of these assets out into a newly listed company and will spin off ownership among its shareholders.

There are plenty of more details about the Disney-Fox deal -- including the "reuniting" of X-men with Disney-owned Marvel -- which can be found in Disney's press release.

Tags: Disney, Fox

Discuss this article in our forums