On the heels of Judge Leon’s decision to approve the AT&T-Time Warner merger, officials of Twenty-First Century Fox (21CF) confirmed Wednesday that they had received an unsolicited, written offer from Comcast to acquire film, cable, broadcast television and other assets that TFCF had previously committed to sell to the Walt Disney Company.
Last December, Disney and 21CF announced the signing of a definitive agreement through which Disney would acquire the Twentieth Century Fox film and television studios along with cable and international television businesses owned by 21CF. As stated at the time in the companies’ joint press release, that transaction would be immediately preceded by the separation of the Fox Broadcasting Network, Fox broadcast television stations, the Fox News Channel and other Fox cable networks into a newly-listed company (New Fox) that would be spun off to shareholders. Intended to complement and enhance “the Walt Disney Company’s ability to provider consumers around the world with more appealing content and entertainment options,” the proposed Disney-21CF deal would provide 21CF stockholders with 0.2745 Disney shares for every 21CF share held, which implies a total equity value of $52.4 billion. With the assumption of $13.7 billion in net 21CF debt by Disney, the total transaction value rises to approximately $66.1 billion.
Shareholders of 21CF are scheduled to vote on the Disney agreement on July 10. Meanwhile, in a press release which includes a copy of Comcast CEO Brian Roberts’ letter to the 21CF board, Comcast outlined what it described as a “superior, all-cash proposal” through which 21CF stockowners would receive $35 per share in cash from Comcast. As he emphasized that Comcast’s cash bid represents a premium of 19% over the value of the Disney offer, Roberts stressed that 21CF shareholders would also receive “100 percent of the shares of New Fox after giving effect to the proposed spin-off, providing superior and more certain value as compared to Disney’s all-stock offer.” Observing, “the 21CF businesses to be sold are highly complementary to ours, and . . . our company would be the right strategic fit for them,” Roberts voiced confidence that the “proposed transaction will obtain all necessary regulatory approvals in a timely manner.” While it confirmed receipt of the Comcast offer, 21CF said it “has not yet made a determination, in light of Comcast’s proposal, as to whether it will postpone or adjourn the July 10, 2018 special meeting of stockholders to consider . . . the Disney merger agreement.”