Disney Ups 21st Century Fox Bid To $70 Billion

In a statement Wednesday Disney said it is raising its offer because Fox's value increased due to "tax reform and operating improvements."


The battle for Twenty-First Century Fox reflects a new imperative among entertainment and telecommunications firms. They are amassing ever more programming to better compete with technology companies such as Amazon and Netflix for viewers’ attention — and dollars. The bidding war comes after AT&T bought Time Warner for $81 billion, after a federal judge rejected the government’s antitrust concerns.

In a statement Wednesday Disney said it is raising its offer because Fox’s value increased due to “tax reform and operating improvements.”

“After six months of integration planning we’re even more enthusiastic and confident in the strategic fit of the assets and the talent at Fox,” said CEO Bob Iger in a statement.

In a call with analysts, Iger said he believes Disney’s bid is superior to Comcast’s from a regulatory perspective, and said that six months of dealing with regulators both in the U.S. and internationally has given Disney a “meaningful head start.”

Comcast, based in Philadelphia, did not immediately respond to a request for comment.

So just how high can the bidding war go? GBH Insights analyst Dan Ives said he thinks the “line in the sand” is $75 billion to $80 billion.

“Above $80 billion would be a tough pill to swallow for Disney shareholders given the steep price,” he said. “That said, this poker game appears to be just getting started and now it’s Comcast and (Comcast CEO Brian) Roberts move to show their next hand.”

The deal would include Fox film and TV studios, some cable networks and international assets, but not Fox News Channel or the Fox television network.

Fox CEO Rupert Murdoch said the company “firmly believes” that the combination with Disney is a good fit.

“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,” he said in a statement.

But the New York company also said it is still weighing both offers, and noted that Disney’s new bid doesn’t have any provisions in it that prevents Fox from considering other offers.

Fox and Disney shareholders had been scheduled to vote on Disney’s original bid July 10, but that meeting has been postponed.

In morning trading, shares of Twenty-First Century Fox rallied 6% to $47.47. Disney edged up 89 cents to $106.99 while Comcast rose 8 cents to $32.89.

(© Copyright 2018 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)

 

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