Comcast makes $65 bn cash offer for 21CF assets including Star India
MUMBAI: US distribution giant Comcast is unwilling to give up on the acquisition of 21st Century Fox assets. The company has made a cash offer of $65 billion of 21st Century Fox’s film and television assets which include Star India.
In December, The Walt Disney Company had entered into a definitive agreement to acquire 21st Century Fox, including the Twentieth Century Fox Film and Television studios, along with cable and international TV businesses, for approximately $52.4 billion in stock.
21st Century Fox has convened a special meeting of its stockholders on 10 July to consider and vote on the merger agreement with The Walt Disney Company.
The latest offer puts Comcast at loggerheads with Disney. The two companies are also vying for the BSkyB business in the UK.
On Wednesday, Comcast delivered a letter to the Board of Directors of 21st Century Fox stating that it is willing to acquire the assets for $35 per share in cash, which represents a premium of approximately 19% to the value of Disney’s all-stock offer.
“The structure and other terms of Comcast’s proposal, including with respect to the spin-off of “New Fox” and the regulatory risk provisions and related termination fee, are at least as favorable to 21CF shareholders as the Disney offer,” Comcast said.
The company has revised its earlier proposal to address the 21CF Board of Directors’ stated concerns regarding the treatment of any required regulatory divestitures, including their tax costs, and a reverse termination fee.
Comcast has agreed to the same divestiture package as Disney which includes a commitment to divest (i) any of 21CF’s RSNs and (ii) other 21CF assets representing up to $500 million of EBITDA (less up to $250 million of EBITDA attributable to divested RSNs).
It has also agreed to the same allocation of any tax obligations as Disney in connection with any required divestitures in addition to the same reverse termination fee of $2.5 billion as Disney, in the event the transaction does not close as a result of a failure to obtain the required regulatory approvals.
“We will also agree to behavioral restrictions as extensive as those agreed to by Disney and, like Disney, we will also agree to litigate any action taken by the Department of Justice to block the transaction,” it stated.
In addition to the payment of the $2.5 billion reverse termination fee, in the unlikely event that our transaction is terminated due to a failure to obtain the required regulatory approvals, Comcast has also agreed to reimburse 21CF for the $1.525 billion break-up fee required to be paid to Disney in connection with termination of the Disney transaction and entry into a merger agreement with us.
Comcast said that it intends to pursue the acquisition of Sky UK in parallel to the acquisition of 21CF.