Disney looks set to increase bid for Fox with cash component

Walt Disney Co. is said to be planning to add a cash component in bid to beat Comcast to Fox’s lucrative IPs.

Disney is preparing to increase its offer for the 21st Century Fox assets reports CNBC.

Comcast and Disney have gone head to head to win a lucrative portion of 21st Century Fox Inc’s assets, including valuable IPs such as The Simpsons and X Men. Disney originally offered $52.4 billion in stock. Comcast recently topped the offer, offering $35 per share – a 19 percent premium over the Disney prospectus. Comcast also offered cash, rather than Disney’s stock offer.

Now Disney seems likely to add a cash element to its previously agreed $52.4bn stock offer. It isn’t yet certain if Disney will offer more than Comcast’s cash bid. However, the company will propose that its offer has a better chance of achieving antitrust approval.

Disney’s offer is now worth around $55 billion as its shares saw an increase since the original offer. But Disney shares have recently fallen due to investor concern about how far the company will go to beat the Comcast bid.

Comcast has stated it would pay the $1.5bn fee Fox would owe to Disney if it reneged on the agreement.

The Murdochs are under shareholder pressure to consider Comcast’s bid. Last month activist investor Christopher Hohn said he had built a 7.4 per cent stake in the company. Writing to Rupert Murdoch, he said he was “aware that the Murdoch family has a potential conflict of interest because of capital gains tax, which could lead them to preferring a lower priced Disney stock offer, to a higher priced offer from Comcast”.

Whatever Disney offers, it’s unlikely to see an end to the matter. “We doubt that was Comcast’s best-and-final offer,” said Todd Juenger, an analyst at AllianceBernstein in a report from the FT.

Disney and Fox declined to comment.

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