Disney’s Iger Remains Confident on Fox Deal as Comcast Circles

Walt Disney Co.
’s Robert Iger said he’s confident he can clinch a $52.4 billion deal for 21st Century Fox’s assets, despite the prospect of a bidding war against Comcast Corp.

Disney’s chairman and chief executive officer said it’s “way too early” to speculate about the possibility of an auction for the assets his company agreed to buy in December. Iger reiterated his argument that the value of those assets combined with his company, along with what he said were Disney’s better prospects for securing regulatory approval, make it the best choice for Fox shareholders.

“Is this a deal you believe that regulators around the world — because around the world is very important here — are going to ultimately approve?” Iger said in a Bloomberg TV interview. “We believe — we are actually quite confident — that we will gain that approval.”

The combination of the two companies’ assets presents a “very, very compelling proposition” for shareholders of Disney as well as Fox, whose board unanimously approved the deal, Iger said.

Investors remain skeptical. Shares fell as much as 1.8 percent in late trading on Tuesday, despite Disney reporting generally upbeat
. The quarter included the February release of the film “Black Panther,” which has generated more than $1.3 billion in worldwide ticket sales.

Comcast has begun preparing a new push for the Fox assets. Its earlier offer, rejected by Rupert Murdoch’s Fox, had topped Disney’s by at least 16 percent, according to corporate filings. The cable company is
lining up
financing for a fresh tilt at the assets, a person familiar with the matter said this week.

Comcast Risks

Fox agreed in December to sell its film and TV studios, cable channels including FX and National Geographic and other assets to Burbank, California-based Disney in an all-stock deal. Comcast said at the time that it “never got the level of engagement needed to make a definitive offer.”

At the time, the Fox board concluded that Comcast carried a “significant risk of exposure to a range of negative outcomes” for the company and its shareholders. That included greater regulatory risk and a higher tax burden from potential divestitures. Disney’s offer to pay a $2.5 billion breakup fee in case the deal is blocked by regulators also gave it the edge, according to a filing.

A bidding war would further complicate a global game of M&A chess among media giants. Philadelphia-based Comcast has already made a 22 billion pound ($30 billion) offer to acquire the 61 percent stake in European pay-TV group

Sky Plc
that Fox doesn’t already own. Fox and Disney also are interested in buying the business.

Iger, speaking after the company released its earnings, said that while the Fox assets aren’t “absolutely necessary,” they would be “more than just nice.”

The purchase, he said, would increase Disney’s intellectual property profile, boost its ability to reach more people in more compelling ways through better technology, and allow it to diversify geographically.

— With assistance by David Westin

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