Disney ups the stakes to $70B in bid for 21st Century Fox

Posted:
in General Discussion edited June 2018
The Walt Disney Company has agreed to raise its offer to buy assets from 21st Century Fox, in order to fend off an all-cash offer from Comcast in the high-stakes media bidding war.




The new offer from Disney is a mix of cash and stock, with Fox shareholder able to choose to accept up to 50 percent of the purchase in cash, reports the Wall Street Journal. Disney's previous offer was for $52.4 billion in stock with no cash component.

Fox is effectively valued at $38 per share under Disney's new bid, up from the $28 per share valuation of the earlier offer. Before Fox agreed to Disney's new bid, the media giant had rejected an offer from Comcast valued at approximately $65 billion, or $35 per share.

In a statement, Fox declared the Disney offer "is superior to the proposal" made by Comcast earlier this month. This may be in reference to Comcast's press release from May, proclaiming it had a "superior all-cash offer" for the assets.

Fox has also postponed a special meeting of shareholders over the matter, shifting it from July 10 to "a future date."

The proposals from both sides aren't to acquire the entire Fox organization, but for assets within it. This largely consists of the Twentieth Century Fox film and TV studio, cable networks in the United States including FX and regional sports channels, assorted international assets including satellite broadcaster Sky PLC and Star India, and a one-third stake in Hulu.

Excluded from the deal are assets including Fox News, Fox Sports 1, the Fox broadcast network, and its collection of television stations. Such assets will be incorporated into a new company, tentatively called "New Fox."

Considering each of the bidders are major media organizations in their own right, succeeding in acquiring assets from Fox will mean the winning company will have substantial influence across the rest of the industry.

Regardless of the proposal, it still needs to be approved by shareholders, as well as pass regulatory scrutiny from the U.S. Federal Trade Commission and other government bodies, before being allowed to proceed.

Disney Chief Executive Bob Iger (left) and Rupert Murdoch
Disney Chief Executive Bob Iger (left) and Rupert Murdoch


It is thought that Apple favors Disney in the bidding war, due to its close ties to the company that could offer some benefits. Disney CEO Bob Iger is a member of Apple's board of directors, while former Apple CEO Steve Jobs became Disney's largest individual shareholder following the buyout of Pixar. Apple also frequently promotes Disney properties in its marketing efforts.

In terms of the streaming marketplace, the share in Hulu would give the winning bidder a lot more say in how the service operates in future, which could be of concern to the other companies.

Disney has plans to launch its own streaming service in the future, competing against Netflix and other major players, with it hosting blockbuster properties of its own creation as well as those from the Marvel and Star Wars franchises. Disney is already looking to end its partnership with Netflix, effectively removing Disney and other properties from its catalog and potentially making them exclusive to Disney's future service.

If Disney also extends its exclusivity to Fox content, this could result in even more TV shows and movies being pulled from Netflix, causing even more trouble for the major streaming service.

Apple's plans to increase its streaming video arm are unlikely to be affected by the change in ownership of Fox's related assets directly, but could increase competition in the long term. Apple is reportedly spending $1 billion on unique content and programming, with the first expected to arrive sometime in 2019, possibly as early as March.

The slate of upcoming Apple TV shows is wide and varied, including a remake of anthology series "Amazing Stories," an adaptation of Isaac Asimov's "Foundation," and true crime podcast-related drama "Are You Sleeping." Apple is also said to be in negotiations with Oscar-nominated Irish studio Cartoon Saloon for an animated feature film, and has also entered into a multi-year deal with Oprah Winfrey.

Comments

  • Reply 1 of 18
    asciiascii Posts: 5,941member
    The Murdochs are smart, one of those dynastic families. If they are getting out of something not sure I would want to be getting in.
  • Reply 2 of 18
    SpamSandwichSpamSandwich Posts: 30,740member
    Apple should go in on this bid with Disney. Sweeten the deal and Comcast will fold.
    h2pclaire1
  • Reply 3 of 18
    macxpressmacxpress Posts: 4,761member
    Apple should go in on this bid with Disney. Sweeten the deal and Comcast will fold.
    Oh but then Apple would have a monopoly... /s
    lkrupp
  • Reply 4 of 18
    MacProMacPro Posts: 18,011member
    Apple should go in on this bid with Disney. Sweeten the deal and Comcast will fold.
    Good idea.
    SpamSandwichmelodyof1974
  • Reply 5 of 18
    Disney is Empire of Evil #1 and Fox/NewsCorp is Empire of Evil #2 Comcast is Empire of Evil #3.

    If Apple is getting into content in a big way Disney is a competitor and that will become increasingly apparent over time. 

    The current market cap of Disney is $160 Billion +/-

    Buy them now or fight them later.
    h2pclaire1
  • Reply 6 of 18
    lkrupplkrupp Posts: 6,711member
    The flood gates have opened with the completion of the AT&T/Time Warner acquisition. First it was Net Neutrality, now this. Will the “government should protect me and regulate everything” movement wring their hands in paranoid angst, waiting till they can’t get to moveon.org because an evil empire has blocked them?
    h2p
  • Reply 7 of 18
    tallest skiltallest skil Posts: 43,399member
    lkrupp said:
    The flood gates have opened with the completion of the AT&T/Time Warner acquisition. First it was Net Neutrality, now this. Will the “government should protect me and regulate everything” movement wring their hands in paranoid angst, waiting till they can’t get to moveon.org because an evil empire has blocked them?
    Normally I agree with you, but we only have six media companies and they’re all run by the same people. They have to be broken up and utterly destroyed. The same goes for the 10 food companies and even some of the tech giants. Well, one of them. Make the industry diverse again. This is seven years ago, and further consolidation has happened since then. I can’t find the full resolution anywhere anymore.


    jony0
  • Reply 8 of 18
    nunzynunzy Posts: 662member
    Apple should go in on this bid with Disney. Sweeten the deal and Comcast will fold.
    Apple could just buy Disney. For cash.

    Apple doesn't care what these little companies do. If they misbehave, Apple can crush them.
  • Reply 9 of 18
    spice-boyspice-boy Posts: 705member
    Does this mean the end to "news hostesses" dolled up for the eyes of the tweeter in chief? 
  • Reply 10 of 18
    FolioFolio Posts: 488member
    Depth of back catalogs may determine 1. how sticky your streaming app is 2. how much recurrent licensing revenue rivals pay. 3. ability to build series, games, and merchandise on established franchises. We all know Apple likes to grow organically, so please send any ideas on the next great superhero to Cupertino. ;-)
  • Reply 11 of 18
    anomeanome Posts: 1,243member
    spice-boy said:
    Does this mean the end to "news hostesses" dolled up for the eyes of the tweeter in chief? 

    It's just for the entertainment division, not the "news" division, so Fox News isn't going anywhere. Rupert's just decided to ditch the movies, TV, etc. He may be looking towards his exit strategy, given his age and the mess the kids keep making of the business deals. That or he needs a sudden injection of cash to fund his escape plan.

    While I would like to see Marvel regain control of the X-Men, Fantastic Four, and related properties, I'd rather see it by the studios working together, rather than all ending up belonging to Disney. I'm not a fan of massive, monolithic corporate entities at the best of times, and Disney has shown itself in the past to be one of the least pleasant. Really, the Marvel Cinematic Universe is not important enough to me to want to see all entertainment being manufactured by just one or two massive studios just to make some guys in Hollywood a bit richer.

    edited June 2018
  • Reply 12 of 18
    claire1claire1 Posts: 494unconfirmed, member
    nunzy said:
    Apple should go in on this bid with Disney. Sweeten the deal and Comcast will fold.
    Apple could just buy Disney. For cash.

    Apple doesn't care what these little companies do. If they misbehave, Apple can crush them.
    I'm all for Apple buying Disney now.

    The problem with your theory is that Disney can just say "no". They don't have to sell.

    Although I wonder what Steve Jobs' wife is doing with her big share of Disney. I was surprised to see Samsung get Disney licenses for their new iKnockoffs. Maybe her share isn't big enough? This is one of the only times I can confidently say "Steve wouldn't have let that happen."
  • Reply 13 of 18
    MacProMacPro Posts: 18,011member

    Disney won!  YAY!!!!
  • Reply 14 of 18
    SpamSandwichSpamSandwich Posts: 30,740member
    Update:  

    Disney Boosts Fox Bid to $71.3 Billion in Cash and Stock

    https://www.hollywoodreporter.com/news/disney-boosts-fox-bid-713-billion-cash-stock-1120841


  • Reply 15 of 18
    ascii said:
    The Murdochs are smart, one of those dynastic families. If they are getting out of something not sure I would want to be getting in.
    That was one of the first things I thought too when word of selling up first surfaced. The other train of thought is that Rupert is getting old and doesn't trust his kids to maintain the legacy - better to sell up while it's still worth something than risk his kids destroying his empire.
  • Reply 16 of 18
    badmonkbadmonk Posts: 754member
    i don’t think Apple + Disney is a good idea because Apple doesn’t want to do theme parks etc,but if this deal drives Netflix into the arms of Apple that would be interesting...
  • Reply 17 of 18
    tallest skiltallest skil Posts: 43,399member
    badmonk said:
    i don’t think Apple + Disney is a good idea because Apple doesn’t want to do theme parks etc,but if this deal drives Netflix into the arms of Apple that would be interesting...
    But they already have Apple Park. Just build some rides around it and they’re good to go.

  • Reply 18 of 18
    SpamSandwichSpamSandwich Posts: 30,740member
    badmonk said:
    i don’t think Apple + Disney is a good idea because Apple doesn’t want to do theme parks etc,but if this deal drives Netflix into the arms of Apple that would be interesting...
    Netflix has no reason to sell at this point. They have massively successful and growing business and I think they've grown beyond seeking partners or buyers.
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