Comcast Makes Superior Cash Offer for Fox Assets

Comcast has offered to buy the assets that 21st Century Fox agreed to sell to The Walt Disney Company for $35 per share in cash, a 19-percent premium on the Disney all-stock offer.

The $65 billion offer was made in a letter to Rupert Murdoch, Lachlan Murdoch and James Murdoch from Comcast Chairman and CEO Brian Roberts. “After our meetings last year, we came away convinced that the 21CF businesses to be sold are highly complementary to ours, and that our company would be the right strategic home for them,” the letter states.

“In light of yesterday’s decision in the AT&T/Time Warner case, the limited time prior to your shareholders’ meeting, and our strong continued interest, we are pleased to present a new, all-cash proposal that fully addresses the Board’s stated concerns with our prior proposal. We are also highly confident that our proposed transaction will obtain all necessary regulatory approvals in a timely manner and that our transaction is as or more likely to receive regulatory approval than the Disney transaction. Accordingly, we are offering the same regulatory commitments as the ones 21CF has already obtained from Disney, including the same $2.5 billion reverse termination fee agreed to by Disney. To further evidence our commitment, we also are offering to reimburse the $1.525 billion break-up fee to be paid by you to Disney, for a total cost to Comcast of $4.025 billion, in the highly unlikely scenario that our transaction does not close because we fail to obtain all necessary regulatory approvals.”

The letter continues, “Because of your decision to schedule the vote on the Disney merger proposal for July 10, time is of the essence for your consideration of our proposal. We are available to meet at any time to answer questions of the Board, management or your advisors, so that you are in a position to validate the superiority of our offer, and negotiate and enter into a merger agreement, as soon as possible thereafter. Given the very short time frame, today we are filing a preliminary proxy statement with the SEC in opposition to the Disney merger proposal, as we have been advised this is necessary to be in a position to be able to communicate with your shareholders directly regarding the votes they are being asked to cast on July 10. We hope this is precautionary only, as we expect to work together to reach an agreement over the next several days.”

Fox issued a statement acknowledging receipt of the Comcast offer and noting that it “remains subject to the Disney merger agreement. Consistent with the terms of this agreement and the fiduciary duties of the company’s directors, 21st Century Fox’s board, in consultation with its outside legal counsel and financial advisors, will carefully review and consider the Comcast proposal. 21st Century Fox has not yet made a determination, in light of Comcast’s proposal, as to whether it will postpone or adjourn the July 10, 2018, special meeting of stockholders to consider certain proposals related to the Disney merger agreement.”