Walt Disney Co. (NYSE: DIS) revised its offer for Twenty-First Century Fox Inc. (NASDAQ: FOXA), raising its bid to $71.3 billion as well as topping Comcast Corporation’s (NASDAQ: CMCSA) all-cash bid of $65 billion.
“The amended and restated Disney Merger Agreement offers a package of consideration, flexibility and deal certainty enhancements that is superior to the proposal made by the Comcast Corporation on June 13, 2018.” said Fox in a statement, as the company entered into an agreement with Disney.
21st Century Fox shares rose by 6.8 percent during Wednesday’s pre-market hours. Comcast shares were also up during pre-market hours, trading 1.58 percent higher.
Under the agreement, Fox shareholders can choose to receive $38.00 in either cash or Disney shares for every Fox share, which is higher than its previous offer of $28.00 per common stock and edging Comcast’s offer of $35.00 per share.
“The acquisition of 21st Century Fox will bring significant financial value to the shareholders of both companies, and after six months of integration planning we’re even more enthusiastic and confident in the strategic fit of the assets and the talent at Fox,” said Robert Iger, Chairman and Chief Executive Officer, The Walt Disney Company.
Comcast offered Fox a proposal last week a day after a federal judge granted approval of AT&T’s (NYSE: T) acquisition of Time Warner (NYSE: TWX). Sources previously released information that Comcast would bid for Disney if the AT&T and Time Warner merger was approved.
Comcast was prepared to go all out on a bidding war against Disney to acquire Fox. Sources reported that Comcast was willing to bid up to $100 billion for Fox’s assets.
The two are entering into a bidding war as the media industry competition heightens, especially after the AT&T Time Warner merger and major competitors like Netflix Inc. (NASDAQ:NFLX).
Acquiring Fox would allow either Comcast or Disney to own a wide variety of media related assets, bolstering their position in the field. Assets would include channels such as Fox’s movie productions, FX Networks, Fox Sports, U.K. news station Sky plc as well as Fox’s stake in online streaming service Hulu.
Disney will also be assuming Fox’s net debt of $13.8 billion, totaling the value of the agreement to $85.1 billion. The transaction is expected to be accretive to Disney’s earnings per share before the impact of the purchase accounting for the second fiscal year after the close.