Disney and Fox a “Done Deal” and Formal Announcement is Expected Thursday

WDWNT on December 21, 2017

According to CNBC, the Disney-Fox deal is essentially done, and the parties are planning a formal announcement on Thursday, December 14, 2017.

Yesterday, Comcast dropped out of the bidding, leaving Disney as the sole suitor. That left Disney and Fox to just work out financial details, which apparently will be substantially finished by Thursday’s planned announcement.

No additional details have been released regarding exactly which Fox properties will be part of the deal, but our post late last week has all the details and there is no indication that anything has changed.

Fox shareholders will retain ownership of the remaining Fox assets, in a new company valued at around $10 per share. Based on Fox’s share price today of around $34, that means the assets being sold to Disney are valued at $24 per share, or a total of $44.5 billion. Disney will of course pay a premium to that valuation, so we expect the deal to be in the $60+ billion range.

Fox Reportedly Favoring Deal with Disney Over Other Suitors

WDWNT on December 11, 2017

Bloomberg is reporting that Rupert Murdoch and his sons James and Lachlan, who control 21st Century Fox Inc., are favoring Disney as buyer of most of Fox’s assets, because it’s thought to be a better strategic fit and presents fewer regulatory hurdles. News first broke in early November about the potential asset sale. Talks apparently broke down, but then ramped up again this past week.

Although Fox is also in talks with Comcast, insiders are saying the Murdochs are favoring Disney as the buyer of the 20th Century Fox film and TV studio and Fox’s stake in the U.K. pay-TV provider Sky Plc. Fox will retain ownership of Fox News, the Fox broadcast network or the Fox Sports 1 channel.

Fox’s current CEO, James Murdoch, could potentially join Disney in a C-suite role, which would make the issue of Iger’s successor take a new twist. Iger is set to retire in 19 months. Chatter within the company is currently that Bob Chapek, Chairman of Parks and Resorts, is being groomed for the CEO role.

Sky Plc adds an interesting twist to Disney’s plans to launch new streaming services. If Disney buys Fox’s 39 percent stake in Sky, it would trigger a mandatory offer for the rest under U.K. Takeover Panel rules.

Disney-Fox Deal Closer Than Ever As Both Sides Talk With Their Bankers

WDWNT on December 11, 2017

Variety is reporting that the Disney – Fox deal is heating up, and is now closer than it has ever been, as both sides are in number-crunching mode to come to an agreement on valuation in the deal.

width=Disney’s bankers include JP Morgan and Guggenheim Partners, both of which have worked with Disney previously. Goldman Sachs and Centerview Partners are working with 21st Century Fox.

A source has indicated that the deal could be finalized in the next couple of weeks.

Bernstein Research analyst Todd Juenger has calculated the value of the Fox assets at $57.4 billion, give or take a few million. Deals usually command a premium to the value of anywhere between 20-30%, so Disney could be looking at a price tag of $69-74 billion.

The assets in play are:

  • 20th Century Fox film and TV studio
  • All of the FX Networks
  • National Geographic Channels group
  • 22 regional sports networks
  • Fox’s collection of international channels, including Star India
  • Fox’s 39% stake in Sky

Fox would then be left with:

  • Fox Broadcasting Company
  • 28 Fox-owned-and-operated TV stations
  • The national Fox Sports network
  • The Fox News operations

It is also speculated that Fox’s current CEO, James Murdoch, would take a position with Disney, while Fox executive chairman Lachlan Murdoch would stay behind and manage the remaining Fox assets.

As reported previously, Disney CEO Bob Iger will likely stay on past his planned July 2019 retirement if the deal does happen.

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