Walt Disney Co DIS on Wednesday raised its bid for Twenty-First Century Fox Inc Class A FOXA after Comcast Corporation CMCSA upped its offer.
What Happened
Disney and Fox announced they’d entered an amended and restated merger agreement for $38 per share — significantly more than the previously negotiated $28 per share. This deal would be valued at around $70 billion; the original offer price was $52.4 billion in stock.
Why It’s Important
Disney’s latest proposal, which maintains earlier terms with the addition of Fox shareholder optionality to receive payment in cash or Disney stock on a value-equalized basis, again exceeds that of Comcast.
“The amended and restated Disney Merger Agreement offers a package of consideration, flexibility and deal certainty enhancements that is superior to the proposal made by the Comcast Corporation on June 13, 2018,” Fox said in a statement.
It additionally noted that the Comcast proposal could not be expected to yield superior outcomes. For the time being, then, it appears Fox has identified a preferred owner.
"We are extremely proud of the businesses we have built at 21st Century Fox, and firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace at a dynamic time for our industry," Rupert Murdoch, executive chairman of 21st Century Fox, said in a press release. "We remain convinced that the combination of 21CF's iconic assets, brands and franchises with Disney's will create one of the greatest, most innovative companies in the world."
What’s Next
The Fox announcement assured that the board of directors remains free to evaluation competing proposals.
To provide time to review the latest Disney terms and “other developments,” Fox will delay the shareholder merger vote previously scheduled for July 10. The new date is yet to be determined.
Fox shares were up nearly 6 percent to $47.37 in pre-market trading. Disney was up about 1.8 percent to $108 per share.
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