Disney ups bid for Fox to $71.3 billion

Disney ups bid for Fox to $71.3 billion

Disney ups bid for Fox to $71.3 billion

Walt Disney today raised its bid for Twenty-First Century Fox's assets to $71.3 billion, sweetening its offer with cash as it looks to scuttle Comcast's $65 billion offer last week.

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.

"We are extremely proud of the businesses we have built at 21st Century Fox, and firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace at a dynamic time for our industry", said Rupert Murdoch, Executive Chairman of 21st Century Fox.

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Bloomberg is now reporting the Walt Disney Company's potential purchase of 21st Century Fox's entertainment assets is about to pass antitrust approval from USA regulators, according to sources who know about the matter. Still, Fox said that the new Disney/Fox deal "contains no changes to the provisions relating to the company's directors' ability to evaluate a competing proposal", giving Comcast an opening to bid again.

"We are already six months into the regulatory process and we are confident we have a clear and timely path to approval", Disney Chief Executive Officer Bob Iger said Wednesday morning on a call with analysts. Disney said it's raising its offer because Fox's value increased due to "tax reform and operating improvements". In 2017, they had 21.8% while 20th Century Fox had only 12%. Even though a federal judge resoundingly defeated the government's lawsuit seeking to block the vertical merger of AT&T and Time Warner, the Disney CEO said he still believes a more vertical blend of Comcast (whose holdings include the No. 1 USA cable system) and Fox would face scrutiny. Insiders speculated that Comcast would again provide a counter bid, but with federal approval imminent it could be a moot point.

Fox shares rose 5.4 percent, to $47.11, in premarket trading, while Comcast was marginally lower.

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The tussle follows AT&T Inc.'s victory over the U.S. Justice Department in its antitrust battle to take over Time Warner Inc. But it comes with one key change created to stave off Comcast's all-cash offer: a provision that allows Fox shareholders to decide whether to accept their payment in cash or stock. Disney is the parent company of 6abc.

Watch 21st Century Fox trade in real time here.

21st Century Fox is the next big prize as the media industry consolidates to survive against competitors such as Netflix and Facebook.

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

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