On Wednesday, Twenty-First Century Fox (21CF) accepted an “amended and restated” agreement with The Walt Disney Company through which Disney would acquire 21CF at a purchase price of $38 per 21CF share. With the assumption of debt, the revised agreement implies a total equity value of approximately $71.3 billion and a total transaction value of approximately $85.1 billion.
Disney and 21CF entered into the amended agreement a week after Comcast launched its unsolicited offer of $35 per 21CF share for the same film, cable, broadcast television and other assets that 21CF had committed to sell to Disney last December. As 21CF explained in a press statement that the amended and restated Disney agreement “offers a package of consideration, flexibility and deal certainty enhancements that is superior to the proposal made by the Comcast Corporation on June 13,” Disney CEO Robert Iger predicted that the acquisition of 21CF, as specified in the amended agreement, “will bring significant financial value to the shareholders of both companies.”
Under the amended agreement, which covers all of the 21CF assets included in the December agreement, 21CF shareholders may elect to receive $38 in cash for each of their shares or a number of Disney shares that equal to $38 per share in value. The overall mix of consideration paid to 21CF shareholders would be approximately 50% cash (valued at $35.7 billion) and 50% stock (calculated at approximately 343 million new shares) which would leave 21CF stockholders with an approximate 19% stake of in Disney. As 21CF Executive Chairman Rupert Murdoch maintained 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,” Iger proclaimed: “the combination of Disney’s and Fox’s unparalleled collection of businesses and franchises will allow us to . . . deliver more personalized and compelling entertainment experiences to meet growing consumer demand around the world.”