Technology 2 min read

Vertical Mergers: Disney Counters the Fox Comcast Offer

Vertical mergers of this proportion are unprecedented. But since the approval of AT&T and Time Warner, perhaps they are the new norm. With Disney's new ~$70-billion USD bid for Fox, it is difficult to imagine Comcast countering this gargantuan offer.

Disney may have just set itself up to be the new owner of Fox, although will it be enough to offset Comcast's previous bids? | Image by Atstock Productions | Shutterstock

Disney may have just set itself up to be the new owner of Fox, although will it be enough to offset Comcast's previous bids? | Image by Atstock Productions | Shutterstock

As many of you reading this know, Comcast and Disney both want Fox for their own. Now, Disney just dropped a new offer for the media giant.

Bidding wars are great for business, right?

It certainly appears that way for 20th Century Fox, the large media entity looking to sell to either Disney or Comcast. Both companies originally put out insanely high bids to lock down the negotiations.

Since a federal court approved AT&T’s acquisition of Time Warner, vertical mergers like this may be a part of the new business frontier.

Though Comcast countered Disney’s initial offer with a $65 billion bid last week, Disney is not out of the fight yet.

Now, they’ve upped their original bid to a whopping $71.3 billion offer for Fox.

image of Fry from Futurama saying
Disney owning and possibly rebooting Futurama is one of my dreams, but I’m not holding my breath just yet | 20th Century Fox via Know Your Meme

Cash, Stock Options, and Uncertainty

Disney’s original offer wasn’t small at $52.4 billion, which valued Fox at around $28 per stock share. The new offer, in direct competition with Comcast’s, offers $71.3 billion with plenty of unique options for Fox members.

Fox members can choose to receive cash or Disney stock at a 50/50 proration. As you can imagine, this offer might be more appealing for some people since they can increase their takings by playing the stock market.

Though Fox’s board was to meet on July 10th, there is no new meeting date to discuss the deal as of yet. Likely, the company wants to give shareholders time to consider what they can get out of this latest bid.

For Disney or Comcast, it is clear what they want out of the deal:

  • Twentieth Century Fox Television
  • Twentieth Century Fox
  • Fox Searchlight Pictures
  • Fox 2000 film production studios
  • a large stake in the streaming service Hulu

Fox owner Rupert Murdock made a seemingly positive statement hinting that Fox will accept the Disney bid.

“We are extremely proud of the businesses we have built at 21st Century Fox, and firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace at a dynamic time for our industry…”

We will have to see if Comcast makes another counter offer before Murdock agrees.

How do you feel about these vertical mergers in media and services?

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Juliet Childers

Content Specialist and EDGY OG with a (mostly) healthy obsession with video games. She covers Industry buzz including VR/AR, content marketing, cybersecurity, AI, and many more.

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