Disney increases bid for Fox, topping Comcast offer

Quentin Webb 
Epic trade-war front page from Apple Daily

Quentin Webb Epic trade-war front page from Apple Daily

Fox Executive Chairman Rupert Murdoch clearly prefers to sell to Disney for these reasons.

Mr Murdoch has always favoured Disney's offer because he is a big admirer of the company's chief executive, Bob Iger, under whom Disney has become a global entertainment and theme parks powerhouse enjoying substantially stronger growth than the wider media sector.

However, Comcast broke cover in February to launch a rival bid for Sky in competition with Fox and then, last week, tabled an offer for the Fox entertainment assets in competition with Disney.

Disney chairman and chief executive Robert Iger said the acquisition of the 20th Century Fox studios and television assets in the U.S. and overseas would better position his company to compete in a media landscape being disrupted by big technology players.

Fox said the company directors remain open to "evaluating a competing proposal".

Shares of 21st Century Fox are up more than 7% Wednesday, and have gained about 40% this year. However, just a few days back, Comcast threw down the gauntlet, putting in a $65 billion all-cash bid. 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. A Disney representative didn't immediately respond to requests for comment. Fox has attempted to acquire the portion of Sky that it doesn't already own, but Comcast swooped in with a higher bid. "They are out of the game right now!"

"Disney believes the transaction has a clear and timely path to regulatory approval", Disney's announcement said.

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"For all these reasons we have a much better opportunity in terms of approval and timing of that approval than Comcast does in this case", Iger said on the call.

Iger said Disney has been working with regulators in the US and around the world and has "made a lot of progress" toward obtaining approvals.

Any takeover by either Disney or Comcast would be likely to face regulatory scrutiny. The bidding war comes after AT&T bought Time Warner for $81 billion, after a federal judge rejected the government's antitrust concerns.

Shares of Fox jumped $2.88, or 6.5 percent, to $47.16 in early trading, which may suggest investors are expecting Comcast to return with an upped bid.

Fox shares rose almost 8% on Wednesday in anticipation.

Disney just raised the stakes in the fight for 21st Century Fox. In a statement Wednesday Disney said it is raising its offer because Fox's value increased due to "tax reform and operating improvements". 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.

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