Disney might have just been outfoxed by Comcast in its quest to acquire 21st Century Fox. The cable giant has entered a $65 billion all-cash bid for Fox properties that many expect will spark a bidding war between themselves and Disney, who late last year offered $52.4 billion in stock for the properties.
Comcast was rumored to be interested in bidding for much of this year, and it formally announced the bid in a statement it released on Wednesday evening. According to the New York Times, the Comcast bid is not only worth more than Disney’s initial offer but also has financial fail-safes in place in case the deal is not deemed legal by the government:
In December, Disney struck a $52.4 billion, all-stock deal for Fox’s assets. Comcast, whose roughly $60 billion offer for the Fox assets was rebuffed last year, is now including contractual assurances such as a reverse breakup fee — worth about $2.5 billion — in the event a transaction is blocked by the government.
At $35 a share, Comcast’s new offer is about 19 percent higher than Disney’s proposal, according to its statement.
According to the Times, Comcast executives wanted to wait until a federal judge ruled on the legality of a massive merger between AT&T and Time Warner. That deal was approved on Monday, giving the largest cable company in the United States optimism that a similar deal for a large number of Fox’s assets would potentially go through.
The logistics and money involved here might not matter as much to some fans as what it means for their favorite properties. A deal with Disney would put most of Marvel’s superheroes under the same roof, though Fox is going to pump out as many films as possible until any deal is official. Comcast swooping in to buy 21st Century Fox would change all that, of course, and give them a bevy of regional sports networks to boot while unfortunately destroying hopes for any Avengers/X-Men crossover movies.
As Variety explains, there’s a lot to like about the deal for each bidder, both of which have paid to get bigger in recent years.
Comcast’s bid sets up a showdown for a once-in-a-generation opportunity that could cement Disney CEO Bob Iger’s legacy. Sealing a deal for Fox would cap off a spate of massive acquisitions under his aegis at Disney, which include a $4 billion buy of Marvel Entertainment in 2009; a $4 billion purchase of Lucasfilm in 2009; and $2.58 billion over three years for BAMTech, the streaming-video unit that is meant to power Disney’s various subscription-based video outlets.
But a deal would bolster Comcast in similar fashion, adding new heft to its Universal movie production operations, its NBC Sports unit, and its cable programming operations, among other properties. And a win would lend Comcast new momentum in its quest to grow after AT&T was granted permission Tuesday to complete its $85.4 billion purchase of Time Warner.
Any bidding war is good news for Fox, however, which will reportedly retain Fox News, its national Fox Sports channels and Fox Broadcasting under its control. And as Variety reported, backing out of a deal with Disney could cost Fox to the tune of $1.52 billion if the decision isn’t related to a regulator blocking the sale. But Comcast said it will reimburse Fox if they accept their bid, making the cost for the cable giant even higher. No one knows exactly what happens next and the ball is firmly in Fox’s court here, but it’s clear now that what was thought to be a done deal for Disney just got much more complicated.