Comcast is still lurking, but the Disney-Fox deal looks to be cleared for landing.
Disney announced Wednesday that it has increased its bid for the majority of 21st Century Fox assets from $52.5 to $71.3 billion. The sweetened bid is a counter to Comcast’s spoiler offer of $65 billion, which was announced days earlier. Comcast is expected to respond with an even higher bid.
To put the numbers in perspective, AT&T acquired all of Time Warner for $85 billion.
Disney’s new offer has a distinct advantage over Comcast. The price tag is about evenly split between cash ($35.7B) and stock ($36.4B), a shift from the all-stock bid Fox agreed to in December. Comcast’s bid is all cash. As The New York Times noted, the cash-stock split allows Disney to appeal equally to Fox stakeholders, who would prefer to be paid now, and the Murdoch family — who would avoid a “big tax bill” receiving stock rather than cash.
In a regulatory filing on Thursday, Disney reiterated its willingness to divest some of the Fox assets — including the Fox Sports regional sports networks — if necessary to gain approval. As Recode noted earlier this month, Disney has been public about its willingness to divest for several months.
According to Bloomberg, Disney could win antitrust approval from the U.S. justice department in as little as two weeks. The government made a big show of holding up the AT&T-Time Warner merger before being slapped down in court earlier this month. It was not clear whether approval would be conditioned on divesting any assets; AT&T was able to acquire Time Warner without spinning off any properties (albeit after being taken to court on antitrust grounds).
Should Disney (or Comcast) divest the RSNs, the landing spot for the 22 networks would become one of the bigger stories in the sports media. The RSNs alone were valued at more than $22 billion according to estimates cited by Los Angeles Times last year.
[News from Disney 6.20, Investopedia 6.21, Bloomberg 6.20, NYT 6.20]
