Coming in faster than just about anyone expected, the Disney-Fox Deal got a mostly proverbial thumbs up from the US Department of Justice on Wednesday. Indeed, the DOJ released provisional approval over Disney’s acquisition of 21st Century Fox’s biggest media production assets, with the quid pro quo that Disney not absorb Fox’s regional sports networks portfolio in America. Disney has quickly provided their own update by confirming they would sell off 21st Century Fox’s 22 regional sports networks, provided that the deal goes through.
Sure to strengthen The Walt Disney Company’s hand in what has become something of a bidding war between the Mouse House and fellow media conglomerate Comcast, this quick turnaround makes a Disney acquisition appear more likely. This comes on the heels of Disney upping its offer from a previous $52.4 billion to $71.3 billion, which is obviously a higher number than when Comcast tried to upend the deal earlier in the month by making a cash bid of $65 billion for assets that include 20th Century Fox, Fox Searchlight, the Sky network, and Star India.
Additionally, Disney’s bid, which is a mixture of cash and shares in Disney stock, is sweeter still because the House of Mouse is offering to absorb $13.8 billion of Fox’s debt, bringing the total value of their offer to $85.1 billion.
While Comcast has not come back yet with a counteroffer to Disney’s total $85.1 billion number, we imagine it will become much harder to dissuade Fox shareholders, and particularly its board of directors on which Rupert Murdoch sits as chairman, given that they already have the first regulatory hurdle cleared. Comcast did not formalise its cash bid until the Department of Justice was defeated in court in its attempt to stop AT&T’s acquisition of Time-Warner. Nevertheless, Disney being a smaller media conglomerate than Comcast—outside of the movie business—made them a friendlier alternative for Fox, hence why Murdoch originally approached Disney first last year.
This will not be the final regulatory step in the Disney-Fox deal’s legal process, nor have Fox shareholders voted on the deal (a July vote was postponed after Comcast’s $65 billion bid), however it is a pretty clear indicator that it could become a done deal faster than anyone expected, and certainly well before 2019 rolls around.
More as we hear it…