News Disney and Fox come to terms -- announcement soon; huge IP acquisition

pdude81

pdude81

Well-Known Member
Rodan75 said:
With the mix of cash and stock, Disney has plenty of room to grow, so anything from Comcast at this point is just to mess with Disney. Interesting they haven’t announced a counter to SKY yet (if they are going to). Expected that this morning as well.
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I assume it would have to be Fox to bump that offer since they've gone through all the regulatory scrutiny already. Since the culture Secretary just announced that 15 day consultation window to see if anyone else objects to the union, I assume Fox can at least wait that long to see if the landscape changes.
 
S

seascape

Well-Known Member
Rodan75 said:
With the mix of cash and stock, Disney has plenty of room to grow, so anything from Comcast at this point is just to mess with Disney. Interesting they haven’t announced a counter to SKY yet (if they are going to). Expected that this morning as well.
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There is a final bidding process that should be done next week. The interesting thing is that Comcast can't limit their offer to the 61% of Sky that Fox does not own. However Fox does not have to sell. Based on what happened today Comcast may decide to settle for Sky and go all out for it. Then Fox/Disney could negotiate a separate deal for the 39%, which BTW could provide most of the cash Disney needs for the cash portion of the Fox deal or use the cash to expand their Parks and Resorts to further attack Comcast.
 
Indy_UK

Indy_UK

Well-Known Member
It's a clever bid from Disney. How long does Comcast have to respond?

And am I right that on July 10th is when Fox decide who to go with?
 
H

happycamperuni

Active Member
Well, this is probably what Roberts was aiming for at a minimum; Disney switched to a 50-50 cash/stock bid, which means that they're going to put $35 billion in extra cash on the table now as opposed to their previous bid.

I think Comcast has one bid left around the $80 billion range. Then they'll let it go probably. It'll be interesting to see if Comcast tries to switch to a cash and stock bid.

I don't see how Comcast bids higher than $75 billion without adding stock to the mix; they'd be approaching $200 billion in total debt if they stick to all cash and bid $80 billion in cash... That's a silly number.
 
LSLS

LSLS

Well-Known Member
So I know very little on this stuff. I believe I read big debt acquisitions were a large part of what companies like toys r us and Gibson couldn't get out from under. Is there any legit worry that disney is paying too much here and this could start the company spiraling? Or is this still pretty safe even with the large number?
 
Indy_UK

Indy_UK

Well-Known Member
Disney will recoup eventually but aren't they essentially buying what they had years ago with Miramax and Touchstone pictures and couldn't wait to get rid of them. Are the films under those banners still under Disney now?

They are obvious going to keep the Fox brand so this really needs to be what they release their more adult content under
 
H

happycamperuni

Active Member
larryz said:
Comcast still wins -- if they couldn't buy Fox, they at least made Disney pay about $20 billion more for it.

How many parks could have been built / movies been made / broadway shows produced / sports teams been bought for $20 billion dollars?
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It's actually $35+ billion more cash.

Disney's original bid was all-stock (with only $13 billion in debt assumption).

Disney's new bid is 50-50 stock/cash prorated. That means Disney is going to pay $35 billion in cash and take on the $13 billion in debt.
 
H

happycamperuni

Active Member
LSLS said:
So I know very little on this stuff. I believe I read big debt acquisitions were a large part of what companies like toys r us and Gibson couldn't get out from under. Is there any legit worry that disney is paying too much here and this could start the company spiraling? Or is this still pretty safe even with the large number?
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It's starting to reach the point where even Disney will have a lot of debt on its books post-merger:

The original merger agreement was basically an all-stock merger where Disney would have around $40-45 billion in debt on its books post-merger.

The revamped merger agreement is going to feature Disney holding around $75-80 billion in debt on its books post-merger.

And both of those scenarios are before Sky's final 61% is bought with cash (more debt). That's an extra $25-27 billion in debt probably.
 
Indy_UK

Indy_UK

Well-Known Member
Disney can afford to take this debt though.

After buying Fox, Disney will have their fingers in so many pies (movies, merchandise, theme parks, cruises, theatre shows, TV, steaming content and a TV distribution service with SKY) that they really don't need much else.

If they keep building the IP they will own, it will pay off th debt over time.
 
the.dreamfinder

the.dreamfinder

Well-Known Member
smile said:
this is turning to crap

what's the over/under on odds that, years on, we're going to look back at this as having been very bad for either disney or comcast?
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Rupert Murdoch is a master of manipulation and got two dummies to outbid each other for assets, this is primarily an int’l TV deal, which will decline in value as SVOD enters more markets with 5G.
 
H

happycamperuni

Active Member
Retro Oswald said:
Disney can afford to take this debt though.

After buying Fox, Disney will have their fingers in so many pies (movies, merchandise, theme parks, cruises, theatre shows, TV, steaming content and a TV distribution service with SKY) that they really don't need much else.

If they keep building the IP they will own, it will pay off th debt over time.
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Disney already has all of those things (minus the overseas stuff); with only around $30 billion in debt on the books, Disney has EBITDA in the $15-16 billion range annually. Disney can easily build a global streaming service with its own content. I don't see why $90 billion in debt needs to be added to achieve those things.

If Disney gets Fox assets and Sky with an extra $90 billion in debt on the books, you're looking at around $24-25 billion in annual EBITDA but around 4x as high debt payments annually..

Disney's sort of entering the same place Comcast would be in if they got the assets; the question is whether tying up $90 billion in debt is the right move.

Comcast and Disney seem hellbent on these assets though, so maybe they see a path to making it all work. It's just hard though to change business direction when you have that much of your cash flow tied up in paying debt.
 
smile

smile

Well-Known Member
LSLS said:
So I know very little on this stuff. I believe I read big debt acquisitions were a large part of what companies like toys r us and Gibson couldn't get out from under. Is there any legit worry that disney is paying too much here and this could start the company spiraling? Or is this still pretty safe even with the large number?
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offers wouldn't be flying around if misters iger and roberts felt this would ultimately harm them -
however, any double-digit billion dollar transaction is a dangerous game; a game more increasingly dangerous since december.

meanwhile, rupert & co. make out like bandits
 
Rodan75

Rodan75

Well-Known Member
pdude81 said:
I assume it would have to be Fox to bump that offer since they've gone through all the regulatory scrutiny already. Since the culture Secretary just announced that 15 day consultation window to see if anyone else objects to the union, I assume Fox can at least wait that long to see if the landscape changes.
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good point. I keep forgetting that things on the SKY front are moving at a different pace.
 
Rodan75

Rodan75

Well-Known Member
the.dreamfinder said:
Rupert Murdoch is a master of manipulation and got two dummies to outbid each other for assets, this is primarily an int’l TV deal, which will decline in value as SVOD enters more markets with 5G.
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Which I definitely agree with for SKY, but Star India is in a different category and is likely worth more to Disney since it can help Disney penetrate a high growth market more effectively than their previous attempts.
 

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