In One Chart - May 17, 2018
In One Chart: Disney, Comcast go FOX Hunting
As of December, Disney (DIS) had won the battle for acquisition of Twenty-First Century Fox’s entertainment assets, beating out Comcast and Verizon (VZ). That all changed last week when Comcast made a new $60 billion, all-cash offer for those assets.
In other, somewhat related news, our office is still waiting for a Comcast technician to fix our router.
The chart below illustrates the entire timeline of this acquisition battle — which is still playing out. In early November, Disney first announced its plan to purchase Fox assets at $29.54 per share — shooting Fox’s share price straight up. Later in November, Comcast (CMCSA) put their own offer on the table for $34.41 per share, further boosting Fox (FOX) shares and causing Disney to momentarily slip.
But the Comcast offer came with a catch — if regulators blocked the deal Comcast would still get the assets which regulators approve, but would downgrade its per share offer accordingly. Disney’s offer, on the other hand, contained a reverse termination fee of $2.5 billion which, if the deal didn’t go through, Fox would pocket.
Fox ultimately went with Disney, whose offer is considered less likely to face regulator opposition.
Comcast’s all-cash bid last week has caught the eyes of Fox investors in part because, for most, it’s more attractive than the all-stock Disney offer. Cash is a deal sweetener for the common Fox owner, but the Murdoch family, 17% owners of Twenty-First Century Fox, would face hefty capital gains taxes. Comcast has effectively driven a wedge between management and shareholders.
As stakeholders are grappling, it will be interesting to see how Fox handles Comcast’s most recent offer. It will also be interesting to see if Comcast can fix our router before the NBA finals.