21st Century Fox has opted to postpone their shareholder meeting, at which investors will vote whether or not to accept Disney’s buyout offer of $71.3 billion. This offer consists mainly of stocks, but with some added cash to sweeten the deal. The meeting was set to be held in Manhattan on July 10, but will now take place on July 27.
Disney’s original bid was for $52.4B in all stocks, but on June 14th, rival Comcast placed a counteroffer of $65 billion to be paid in all cash. On June 20, Disney came back, maintaining their original all-stock bid, but adding cash on top of that, bringing their total buyout offer to $71.3B.
Just last week the United States Department of Justice approved Disney’s offer, determining that there was no issue with creating a monopoly, as long as Disney sold off Fox’s regional sports outlets, which would conflict with the already Disney-owned ESPN. The Department of Justice has declared that they are also reviewing a filing on the part of Comcast, presumably the last $65B offer.
Fox’s board of directors is advising investors to accept Disney’s deal, but the added time is to allow close examination of Disney’s offer before making a decision. In what is ~surely~ a coincidence, this also allows Comcast time to increase its bid. It is believed that at this point, Comcast is tapped out, but that they are looking for outside sourcing to acquire additional funds.
And even with all of this, Fox still has the option of delaying their meeting again, if necessary. The reason given is legalese, but basically it boils down to the necessary time needed should any new information or amendments require mailing or filing. Presumably, that includes any additional buyout bids.
Last Monday, Fox filed a statement with the Securities and Exchange Commission, in which the board stated that they were more likely to accept Disney’s bid over Comcast’s, saying:
“A strategic transaction with Comcast continued to carry higher regulatory risk leading to the possibility of significant delay in the receipt of merger consideration as well as the risk of an inability to consummate the transactions.”
As stated, it looks like Comcast is out, simply because they don’t have the funds to match Disney. They are reportedly trying to raise it, but that could go either way. For Disney, it becomes a question of just how valuable do they consider Fox and its assets. Because honestly, no matter what Comcast comes back with, Disney could outbid them again, but at that point, it becomes more a matter of whether or not they want to.
Hopefully, this matter comes to a close soon, but keep checking back for updates.
Source: The Wrap