Fox Rejected Higher Comcast Bid Due to Antitrust Concerns
April 18 2018 - 07:13PM
Dow Jones News
By Shalini Ramachandran and Ben Fritz
21st Century Fox Inc. rejected an acquisition offer for its
entertainment assets from cable giant Comcast Corp. largely over
antitrust concerns, according to a regulatory filing, even though
the bid was 16% higher on a per-share basis than what Walt Disney
Co. ultimately agreed to pay.
After extended discussions, Fox's board ultimately decided that
Comcast's offer was too risky to accept, according to the filing.
Fox was concerned such a deal might not pass muster in Washington,
and even if it did, it would require divesting valuable assets that
would reduce the value of the deal to Fox. Comcast also didn't
offer Fox a breakup fee in the event regulators didn't bless the
deal, according to the filing.
Disney's all-stock deal with Fox, reached in December, valued
the company at $29.54 a share based on the last trading day before
it was announced. The filing said a company described as "Party B"
offered an all-stock deal worth $34.41 per share as of November. A
person familiar with the matter confirmed that Party B is
Comcast.
Verizon also showed interest in making an all-stock bid for Fox
assets, according to the filing, but Fox said it would have been
without "any meaningful premium" to Fox shareholders. Verizon was
described in the filing as Party A, the person said.
Fox didn't set a date for a shareholder vote in the filing.
By laying out the back-and-forth with Comcast, Fox is spelling
out for shareholders why it rejected a higher value offer. In its
$52.4 billion deal with Disney, Fox agreed to sell its television
and film studios; cable networks; international assets including
Star India and its stake in European operator Sky PLC; its stake in
streaming service Hulu; and its 22 regional sports networks.
The filing said the Disney deal valued Hulu at $8.73
billion.
The Wall Street Journal reported in February that Comcast had
submitted a bid for Fox's assets that was more than 15% higher than
Disney's.
Write to Shalini Ramachandran at shalini.ramachandran@wsj.com
and Ben Fritz at ben.fritz@wsj.com
(END) Dow Jones Newswires
April 18, 2018 18:58 ET (22:58 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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