Comcast Corp. (CMCSA, Financial), a major holding of Mason Hawkins (Trades, Portfolio)’ Southeastern Asset Management, announced on Wednesday it had made an all-cash proposal to acquire the businesses Twenty-First Century Fox Inc. (FOX, Financial)(FOXA, Financial) has agreed to sell to Walt Disney Co. (DIS, Financial) for $35 per share in cash, reflecting an equity value of approximately $65 billion.
Transaction details
Comcast’s proposal for Fox reflects a premium of approximately 19% to the value of Disney’s all-stock offer as of 11 a.m. on Wednesday. The acquisition is not subject to a financing condition: additionally, Comcast mentioned it has received “Highly Confident” letters from Bank of America Corp. (BAC, Financial) and Wells Fargo & Co. (WFC, Financial).
Company offers merger terms “at least as favorable” to Disney’s
Comcast CEO Brian Roberts mentioned in his proposal that the company has “long admired” the Murdoch family’s achievements at Fox and that Comcast is the “right strategic home” for Fox’s target businesses. In light of several factors, including federal approval of AT&T Inc.’s (T, Financial) merger with Time Warner Inc. (TWX, Financial), Comcast proposed a new offer that provides “superior and more certain value” than Disney’s offer.
Roberts said Comcast’s management is “highly confident” the transaction will succeed since the company offers Fox the same $2.5 billion reverse termination fee offered by Disney, plus an additional $1.525 billion reimbursement for Fox’s liability to Disney in the rare case Comcast does not receive the necessary regulatory approvals to close the merger.
Stocks rise on the merger proposal
Table 1 summarizes the price changes for Comcast, Fox and Disney as of 10:50 a.m. Thursday.
| Stock | Company | Price | Previous Close | Percent Change |
| CMCSA | Comcast | $33.18 | $32.32 | 2.65% |
| FOXA | Twenty-First Century Fox Class A | $44.45 | $43.66 | 1.81% |
| FOX | Twenty-First Century Fox Class B | $44.18 | $43.41 | 1.77% |
| DIS | Walt Disney | $108.32 | $106.30 | 1.90% |
Table 1
See also
In April, GuruFocus launched detailed industry overview pages that present information about the top companies for each industry and key statistics like the median price-earnings ratio and the median return on equity. Figure 1 shows the industry weighting for entertainment companies while Figure 2 shows the industry weighting for telecommunication services companies.
Figure 1
Figure 2
Disclosure: No positions.
