Disney and DOJ reach agreement
WASHINGTON >> Disney took another step toward acquiring most of 21st Century Fox when the Department of Justice announced Wednesday that the parties had reached an agreement that would grant the deal regulatory approval.
That approval is contingent on Disney selling Fox’s 22 regional sports networks that are part of the deal. Many of those networks compete directly with ESPN, which Disney owns.
The news, which came rather quickly given the typically slow pace of regulatory reviews, further paves the way for Disney to win the bid for Fox assets. The company offered $71.3 billion last week in a mix of cash and stock, countering Comcast’s all-cash offer of $65 billion earlier this month.
Comcast could still counter with a new offer, and several people in the mergers and acquisitions community who spoke with The Washington Post suggested that the possibility that the company would seek additional private-equity sources to finance a higher bid was not out of the question.
Still, many also asked whether Comcast’s balance sheet would be able to weather a transaction above $70 billion and the debt it would entail. The stock market was cool to such prospects, sending the Comcast stock price down just about 1.5 percent on Wednesday.
A Comcast spokesman declined to comment on whether the company would come up with a new offer, which it has not done over the past week. If Comcast were to walk away, Disney and Fox would simply need to secure shareholder approval, which at that point would likely be a formality, for the deal to go through.
Rupert Murdoch, whose family controls 17 percent of Fox shares, is believed to heavily prefer the Disney deal because of the stock factor, which would give him a position in the entertainment giant as well as limit, if not eliminate, his tax liability.
Regulatory approval was not considered a significant obstacle and became less of a concern when the Justice Department lost a battle to stop the merger of an even more difficult regulatory sell in AT&T and Time Warner.