Disney/FOX Acquisition Thread

[Nick]

I'm feeling like we could be looking north of $75B once all is said and done here.

I don't see Disney not upping their offer, but it will come down to what the Fox Board wants. Comcast's all-cash offer will be tough to pass up if i'm the FOX board, but If Disney goes high enough with cash + stock on a new offer, it makes for a tough decision. It may just make sense to stick with Disney if FOX can pull more money out of them.

 

[Mad Dog]

Heh, this war could be a blockbuster movie, "Fast & Furious Infinity Wars Two wrecking (Ralph) havoc in Jurassic World Park". Iger & Roberts in super hero costumes. Gotta get a good laugh out of that.

 

[LJGonz]

Could we see Comcast upping their offer if Disney does decide to go bigger? I wasn’t concerned before, but now I’m a little more hesitant at the sure fact that Comcast will buy out Fox...

 

[Parkscope Joe]

I’m not crazy about Comcast winning this bid.

I don’t know anything about Comcast’s financial projections. Let’s assume that they buy Fox and they don’t see as much growth as they want.

What’s the quickest way to get more money? Cut large capital expenditures. The theme park business is nothing but large capital expenditures. I could see the parks lagging for a long while so that Comcast can clean up its balance sheet.

Disney’s theme park devision picks up the slack for bad investments; for Comcast it’s cable and streaming.

 

[quinnmac000]

21st Century Fox & Disney Forced To Increase Sky News’ Budget to $130M | Deadline

 

[zg44]

I’m not crazy about Comcast winning this bid.

I don’t know anything about Comcast’s financial projections. Let’s assume that they buy Fox and they don’t see as much growth as they want.

What’s the quickest way to get more money? Cut large capital expenditures. The theme park business is nothing but large capital expenditures. I could see the parks lagging for a long while so that Comcast can clean up its balance sheet.

There's 2 moving parts here:

1) Universal Resorts is the single fastest growing part of Comcast. It probably gets priority in funding decisions because it gets the biggest return per $ invested. That's why they spent billions purchasing Blackstone's stake in UOR as well as buying out USJ.

2) The tax cuts give a huge benefit in terms of full expensing for large investments over the next 5-10 years, so any investment decisions made over the next 5-10 years would be prioritized for tax benefits.

If you add those two together with the fact that Comcast can probably bring their debt levels down from $175 billion post-merger to $110 billion by 2025, then I think theme park investment would be completely unaffected by any Fox purchase.

Also, another benefit that Universal has is that their hotels are 50-50 owned by the joint venture with Loews, so those debts shouldn't be on Comcast's books.

 

[Parkscope Joe]

Disney Offers to Take on Sky News for 15 Years and Invest $2 Billion – Variety

 

[Teebin]

Wait, I thought Comcast already got Sky.

 

[Mad Dog]

Wait, I thought Comcast already got Sky.

they passed regulatory approval only

 

[zg44]

First Comcast and Disney have to bid on the Fox assets including the 39% of Sky.

Then we may see a bidding war over the remainder of Sky. It's a somewhat complex dance because both Disney and Comcast would like to avoid double bidding on Sky if possible (i.e. bidding up Sky and Fox's 39% of Sky).

 

[zg44]

Endemol Shine, part-owned by Fox, has hired banks to seek a sale
Fox's 50% of Endemol Shine is going to be sold as part of this sale.

So that won't end up going to Disney or Comcast.

 

[Teebin]

Disney raises its bid for Fox to $71 billion

 

[JoeCamel]

And we enter stupidtown at 75B............

Or Roberts just cost Iger 15 billion dollars. What a match.

 

[jtsalien]

And we enter stupidtown at 75B............

Or Roberts just cost Iger 15 billion dollars. What a match.

Pretty unbelievable at this point. Neither company "needs" this deal, but they'll be damned if the other gets it.

 

[Parkscope Joe]

Now let’s see Comcast’s offer. I imagine all cash at a value of $40-42 a share would be incoming.

 

[JoeCamel]

Now let’s see Comcast’s offer. I imagine all cash at a value of $40-42 a share would be incoming.

Rupert and company are in the corner like

 

[zg44]

Biggest part of this seems to be that Disney has shifted its bid to half-debt from all-stock. That means Disney is on the hook for an extra $36 billion in debt.

Probably what Brian Roberts was aiming for if Comcast ends up losing.

But I think Comcast has another bid left to make. Comcast could switch to the same 50/50 prorated bid structure that Disney is using (half-stock, half-cash). I know they mentioned not wanting to do that, but I don't think it's reasonable to be bidding all-cash up to $80 billion. Maybe they do...

 

[Disneyhead]

Brian Roberts has said he is willing to go as high as $85B.

 

[AlexanderMBush]

Brian Roberts has said he is willing to go as high as $85B.

So they are following the example of the Time/AT&T merger then..?

 

[zg44]

Brian Roberts has said he is willing to go as high as $85B.

That's a reasonable upper limit, but I hope they're planning on adding stock to their next bid.

I think Comcast should aim for a maximum debt load of $175-180 billion post-merger.

Adding at least 1/3 stock tells me Roberts wants to make sure he isn't constrained by the debt load in the future.

So they are following the example of the Time/AT&T merger then..?

AT&T appears to have gotten TW on the cheap based on this bidding war for Fox's assets.