What somewhat began simply as the proposed acquisition of 21st Century Fox by The Walt Disney Company, rapidly escalated into an all-out bidding war between the House of Mouse and Comcast. Thankfully, an end to this battle for the rights to intellectual properties owned by the Rupert Murdoch-founded multinational mass media corporation is in sight.
Last week, when it appeared that Comcast had Disney on the ropes with their $65 billion all-cash tender, the Mouse House hit back – and hard, too – when it tabled a $71.3 billion bid, which was quickly green-lit by the Department of Justice. Then, having reportedly accepted Disney’s proposal, the bride-to-be, 21st Century Fox, set July 27th as the date stockholders will vote on the proposed buyout.
Although we’re still roughly three weeks removed from the ballot, Deadline’s reporting that the Disney offer, which is already more lucrative, will also come with certain tax advantages, effectively putting the Mouse House on a route destined for victory.
As we stated last week, Comcast isn’t exactly down and out, what with the global telecommunications conglomerate supposedly “scrambling” to secure funding in hopes of outstripping Disney’s proffer. Nonetheless, with the pledged support of the Murdoch family, including Lachlan and James Murdoch, Rupert’s sons and Executive Chairman and CEO, respectively, any counter bid would have to be considerably bigger than the $65 billion that kicked off the bidding war last month.
Realistically, though, that wouldn’t be good for business anyway, according to Cown and Co. media analyst, Doug Creutz:
“The issue we see here is that the strategic rationale just doesn’t appear to be there for Comcast to chase. Management cited geographic diversification as an important reason for the bid. However, if Comcast shareholders desire that type of diversification, they are completely free to go rebalance their portfolio in the open market without paying a big M&A premium.”
Still, regardless of the outcome, BTIG media analyst, Rich Greenfield believes Disney and Comcast will walk away from the bidding war as “mortal enemies.”
“The source of rising tensions is clear, as Comcast has already forced Disney to pay 35-percent more for Fox than it had originally agreed upon and caused Disney to stop its share repurchase program.”
Seeing as the Murdoch family will vote its “17% of shares in favour of the Disney bid” – and only a 51% majority is needed – Disney needs about “40% of non-Murdoch shareholders to win.” So, those of you in favour of a Guardians of the Galaxy and Deadpool crossover, your wildest dream may soon become a reality.
