Disney’s $71-billion Fox bid backed by proxy firms

Walt Disney’s $71 billion deal with 21st Century Fox won the endorsement of influential proxy advisers Institutional Shareholder Services Inc. and Glass Lewis & Co., giving the entertainment giant another edge over rival suitor Comcast.

Both firms recommended that Fox shareholders vote in favour of the transaction during a July 27 investor meeting, with Glass Lewis arguing that Disney offered “a unique, prospectively far-reaching opportunity” to capitalise on the acquisition. Disney is vying with Comcast to acquire a prized collection of Fox entertainment assets that includes the 20th Century Fox film and TV studios.

Disney increased its bid for the entertainment properties last month by about $10 a share to $38, countering a $35 offer by Comcast.

“The current offer represents compelling value,” ISS said in a report.

Disney is locked in a threeway battle to divvy up the assets of 87-year-old media mogul Rupert Murdoch. In addition to pursuing the entertainment properties, Comcast is vying with the companies for control of UK’s Sky, which is partially owned by Fox. Comcast, the largest US cable company, may decide to pursue Sky in lieu of continuing to try acquire the Fox assets.

In backing Disney’s bid, Glass Lewis said the company may be better positioned to compete in a crowded industry upended by new digital players like Netflix. Some Fox businesses, like Fox News Channel, will be spun off into a new company.