21CF rejected takeover offer from Comcast despite 16% higher bid
MUMBAI: 21st Century Fox had rejected Comcast Corporation’s takeover offer over regulatory concerns even though the latter’s per-share basis bid was 16% higher than the offer made by Walt Disney.
According to a regulatory filing, Disney’s all-stock deal with Fox valued the company’s assets at $29.54 a share while Comcast’s all-stock deal was valued at $34.41 per share.
21CF’s board had decided that Comcast’s offer was too risky to accept.
The Rupert Murdoch-controlled company’s major concern was that the deal with Comcast will find it difficult to get regulatory clearance. The company also feared that a deal with Comcast will require divestiture of valuable assets which would have reduce the value of the deal.
The filing also noted that Comcast didn’t offer Fox a breakup fee in the event the deal didn’t pass the regulatory hurdle. In contrast, Disney would pay to 21CF a reverse termination fee of $2.5 billion if the transactions fail to obtain required regulatory approvals.
Verizon Communications 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 report said.
21CF had finally inked a $52.4 billion deal with Disney to sell its television and film studios; cable networks; international assets including Star India and its stake in European operator Sky; its stake in streaming service Hulu; and its 22 regional sports networks.
As per the filing, the Disney deal valued Hulu at $8.73 billion.
21CF plans to spin off news, sports and broadcast businesses to create an entity called new Fox.