As of June 20th, Disney has raised its offer regarding its purchase of 21st Century Fox from $52.4 billion to $71 billion.
This purchase would give Disney ownership of 20th Century Fox, along with FOX regional sports networks and cable channels such as FX, FXX, and National Geographic.
Disney’s newest bid is in response to a $65 billion bid made last week by Comcast. Comcast officially decided to enter the bid for Fox and its accompanying assets after a federal judge ruled in favor of AT&T’s purchase of Time Warner.
This ruling was clearly a motivator for Comcast to proceed with its bid. Like AT&T, Comcast is a content distributor that wants to buy a content creator, according to CNN.
A bid wasn’t made before due to the belief that the government would not allow the deal to go through due to antitrust concerns. With the current presidential administration in power, however, Comcast has obviously become confident the bid would be allowed by government and it showed this confident by bidding more than Disney’s original bid.
Disney’s CEO Bob Iger apparently met with investors on Wednesday. Iger believes that the deal proposed by Comcast isn’t comparable to the AT&T-Time Warner merger. Comcast is both a cable and broadband provider, and this form of ownership was not addressed in the AT&T-Time Warner case.
Another key component to Comcast’s bid is its all-cash offer. Disney’s original bid was made in stocks, but its new bid allows Fox stockholders to accept their payment in either cash or stock.
Meanwhile, 21st Century Fox seems to be simply enjoying this competition. Robert Murdoch, executive chairman of Fox, said that the company does believe that Disney has the better offer, but that Fox will still consider bids from other companies such as Comcast.
Fox and Disney have been working together for months in order to make their deal successful. However, if Fox backs out of the deal, then it will have to pay Disney a $1.5 billion ‘breakup’ fee. However, this fee seems to be a small sacrifice when considering the sum offered by Comcast.
Fox has postponed a stakeholder meeting that was intended to take place on July 10th, giving the company time to wait on further offers and to consider its options. It seems that Fox won’t choose its winner anytime soon.
21st Century Fox will retain a few assets, which include the Fox broadcasting network, Fox News, and the Fox Sports national cable channels. These assets will be grouped into a new company.
Featured Image via Wikimedia Commons
