Despite Disney gaining approval from the Department of Justice for its $71.3 billion acquisition of 21st Century Fox’s film and TV entertainment assets, Comcast is not out of the running yet. But the clock is ticking.
“This puts them under more time pressure to stop the freight train that is Disney’s current bid,” Laura Martin, an analyst for Needham & Company, told TheWrap on Wednesday. “They had to know a counter bid was coming from Disney — what’s taking so long?”
Earlier Wednesday, the Justice Department signed off on the revised Disney deal in which Disney agreed to divest Fox’s 22 regional sports networks within 90 days of the closing as a condition of antitrust approval.
With the feds signed off, all that’s left is a vote by each company’s shareholders to make the deal official.
But Fox, which had already pushed back a planned July 10 shareholder meeting to vote on the Disney deal, has yet to reschedule a new meeting. Fox attributed the delay to “provide stockholders the opportunity to evaluate the terms of Disney’s revised proposal and other developments to date.” Fox did not immediately respond to TheWrap when asked when it would schedule a new shareholder meeting date.
It’s that lack of a rescheduled shareholder meeting that gives Comcast a window of opportunity to make a more-aggressive counter-offer.
“In a perfect world, Disney would’ve preferred to announce something like this as close to the shareholder vote as they could,” Todd Klein, partner at Revolution Growth, told TheWrap. “If Comcast is going to have to stretch to top this bid, they’ll have the time.”
Prior to the DoJ approval, the Wall Street Journal reported that Comcast was looking to partner with other companies or private-equity investors that could provide additional cash to sweeten its bid. Comcast declined to comment to TheWrap on its plans.
“It doesn’t make a lot of sense for Comcast to now try to raise money to up its bid for these assets,” Ross Gerber, CEO of investment firm Gerber Kawasaki, told TheWrap. “They really need to just walk away.”
The Justice Department’s signoff offers a huge advantage to Disney, removing one major barrier in the minds of shareholders. “Certainty of close is very valuable,” explains Klein.
In an SEC filing on Monday, Fox admitted part of its reasoning to accept Disney’s $71.3 billion offer over Comcast’s $65 billion offer was due to regulatory concerns: “A strategic transaction with Comcast continued to carry higher regulatory risk leading to the possibility of significant delay in the receipt of merger consideration as well as the risk of an inability to consummate the transactions.”
If Comcast CEO Brian Roberts is hoping his third offer is the charm, he’s going to have to reach deeper into the media giant’s pockets — or find a financial partner. “They can’t offer a small premium to Disney anymore,” Klein said. “Comcast now has to essentially pay for the uncertainty or find a way to solve it.”
And that just might be the reason why Fox hasn’t rescheduled a new voting date yet.
“Fox is strategically keeping the emotional charge high and with that, the pressure on Comcast to step up,” said Eric Schiffer, CEO of The Patriarch Organization and chairman of Reputation Management Consultants.
9 Biggest Billion-Dollar Entertainment and Media Deals in 2017 (Photos)
While all eyes were on AT&T's $85 billion acquisition of Time Warner, announced in late 2016 but facing an antitrust lawsuit from the Justice Department, there were plenty of other megadeals in media, tech and entertainment that kept investment bankers busy in 2017.
Here are some of the biggest deals of the year:
Getty Images
Disney to acquire most of 21st Century Fox for $52.4 billion
In a massive deal that could change the entertainment industry even more than AT&T-Time Warner, Disney announced plans to acquire Fox's film and TV studios and much of its non-broadcast television business, including regional sports networks and cable networks such as FX, FXX and Nat Geo. Disney would also pick up Fox’s stake in the European pay-TV giant Sky — and be better positioned to win regulatory approval to complete the acquisition of the 61 percent of the company it does not already own.
Discovery Communications agrees to buy Scripps Networks Interactive for $11.9 billion
The merger of two cable powerhouses brings together channels including Discovery, Science, Food Network and HGTV – and could give the combined company a stronger position as pay-TV continues to migrate to the internet.
Discovery/Scripps
Sinclair Broadcast Group agrees to buy Tribune Media for $3.8 billion
This deal, if approved, would give conservative-leaning Sinclair control of 223 stations in 108 markets, including 39 of the top 50, covering 72 percent of households in the country. And it's only possible under rule changes implemented by new FCC Chairman Ajit Pai.
Sinclair/Tribune
Cineworld offers to buy Regal Cinemas for more than $3 billion
After a string of movie theater mergers last year, the sector has quieted down -- along with the box office. And while this isn’t yet a done deal -- or even an accepted offer -- British chain Cineworld made a late November bid of $23 a share for the U.S.’s No. 2 cinema chain.
Cineworld/Regal
Meredith Corp. acquires Time Inc. for $2.8 billion
The magazine megadeal is a sign of changing times in the publishing industry, with the owner of esteemed brands like Time, Fortune and Sports Illustrated selling to the parent of Better Homes and Gardens and Country Life – backed by $650 million from big-time conservative donors the Koch brothers.
Meredith/Time
Verizon acquires Straight Path Communications for $2.3 billion
Straight Path may not be a household name, but it was the subject of a bidding war between AT&T and Verizon. The company is one of the largest owners of millimeter wave spectrum, seen as key to the buildout of 5G networks, which should power much faster mobile internet -- better for video -- in the near future.
Verizon/Straight Path
Disney buys the rest of BAMTech for $1.6 billion
The Mouse House jumped into internet TV in a major way in 2017, announcing upcoming Disney and ESPN-branded streaming services and acquiring the rest of streaming tech company BAMTech to power those products.
Disney/BAMTech
Entercom buys CBS Radio for $1.5 billion
CBS Radio was intended to be spun off from its broadcast parent in an IPO, but instead it was scooped up by a competitor. The combined company, now the second largest radio business in the country, owns and operates 244 stations in 47 markets.
Entercom/CBS Radio
MGM buys the rest of Epix for $1 billion
The independent studio went all in on the pay-TV business, buying the rest of the premium cable network from Viacom and Lionsgate. And that's paid immediate dividends, as MGM's media networks division propelled it to a strong third quarter.
MGM/Epix
1 of 10
Rewind 2017: Media and content consolidation continued this year
While all eyes were on AT&T's $85 billion acquisition of Time Warner, announced in late 2016 but facing an antitrust lawsuit from the Justice Department, there were plenty of other megadeals in media, tech and entertainment that kept investment bankers busy in 2017.