Disney Ups Fox Bid to $71.3 Billion, Outflanking Comcast

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Fox's board, which agreed six months ago to sell the assets to Walt Disney Co.in an all-stock deal, is convening Wednesday to consider Comcast's $65 billion all-cash proposal, Bloomberg News reported earlier.

Just a few minutes before Iger and other Disney brass got on the phone this morning, they announced a new bid for Fox that is almost 10% above the one submitted last week by Comcast. Disney will acquire 21st Century Fox immediately following the spin-off of the businesses comprising "New Fox" as previously announced.

Fox's worldwide assets such as Star India appeal to both Disney and Comcast, which want to expand their global presence.

"We are extremely proud of the businesses we have built at 21st Century Fox, and firmly believe that this combination with Disney will unlock even more value for shareholders", Murdoch said.

"We remain convinced that the combination of 21CF's iconic assets, brands and franchises with Disney's will create one of the greatest, most innovative companies in the world". "At a time of dynamic change in the entertainment industry, the combination of Disney's and Fox's unparalleled collection of businesses and franchises will allow us to create more appealing high-quality content, expand our direct-to-consumer offerings and global presence, and deliver more personalized and compelling entertainment experiences to meet growing consumer demand around the world".

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If Fox were to start negotiations with Comcast, that could impact plans for shareholders to vote on the Disney deal next month. If 21st Century Fox completes its acquisition of the 61% of Sky it doesn't already own prior to closing of the Disney acquisition, Disney would assume full ownership of Sky, including the assumption of its outstanding debt, upon closing.

If an all-cash bid does eventually beat a stock offer, it could have a bigger tax hit on Rupert Murdoch, Fox's largest shareholder, who controls 17 percent of the company's voting shares along with his family. That would lift the total transaction value above about $85-billion.

Also at stake is the ownership of streaming service Hulu.

However, the amended and restated Disney Merger Agreement contains no changes to the provisions relating to the Company's directors' ability to evaluate a competing proposal.

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