Comcast Bids $65B for 21CF
June 14, 2018
delivered a letter to the Board of Directors of Twenty-First Century Fox
setting forth the terms of a superiorproposal by Comcast to acquire the
businesses that 21CF has agreed to sell to Disney for $35.00 per share
in cash, which represents a premium of approximately 19% to the value of
Disney’s all-stock offer as of 12:00 p.m., noon (Eastern Time) on June
The structure and other terms of
Comcast’s proposal, including with respect to the spin-off of “New Fox”
and the regulatory risk provisions and related termination fee, are at
least as favorable to 21CF shareholders as the Disney offer.
following is a copy of the letter that Comcast delivered to the Board of
Directors of 21CF:
June 13, 2018
Board of Directors
Twenty-First Century Fox, Inc.
1211 Avenue of the Americas
New York, New York 10036
Mr. K. Rupert
Murdoch, Executive Chairman
Mr. Lachlan K.
Murdoch, Executive Chairman
Mr. James R. Murdoch,
Chief Executive Officer
Dear Rupert, Lachlan
We have long admired
what the Murdoch family has built at Twenty-First Century Fox.
After our meetings last year, we came away convinced that the 21CF
businesses to be sold are highly complementary to ours, and that our
company would be the right strategic home for them.
So, we were
disappointed when 21CF decided to enter into a transaction with The
Walt Disney Company, even though we had offered a meaningfully
higher price. We have reviewed the publicly available terms of the
proposed Disney transaction, as well as the joint proxy
statement/prospectus filed with the SEC describing the
reasons for the 21CF Board of Directors’ decision. In light of
yesterday’s decision in the
AT&T/Time Warner case, the
limited time prior to your shareholders’ meeting, and our strong
continued interest, we are pleased to present a new, all-cash
proposal that fully addresses the Board’s stated concerns with our
Our new proposal
offers 21CF shareholders
$35.00 per share in cash and 100% of the shares of New Fox after
giving effect to its proposed spinoff, providing superior and more
certain value as compared to Disney’s all-stock offer. Our proposal
represents a premium of approximately 19% to the value of Disney’s
offer as of noon today. We are highly confident in our ability to
finance the transaction, and our offer includes no financing-related
We are also highly
confident that our proposed transaction will obtain all necessary
regulatory approvals in a timely manner and that our transaction is
as or more likely to receive regulatory approval than the
Disney transaction. Accordingly, we are offering the same
regulatory commitments as the ones 21CF has already obtained from
Disney, including the same $2.5 billion reverse
termination fee agreed to by Disney. To further evidence
our commitment, we also are offering to reimburse the $1.525
break-up fee to be paid by you to Disney, for a total
cost to Comcast of $4.025 billion,
in the highly unlikely scenario that our transaction does not close
because we fail to obtain all necessary regulatory approvals.
We welcome the
opportunity to discuss the regulatory issues presented by each deal.
We note that there should not be any meaningful difference in the
timing of the U.S. antitrust review between a Comcast and Disney
transaction. We have made our HSR filing today, which formally
begins our regulatory review at the DOJ. In addition, we have
already submitted a large volume of documents and data to the DOJ in
connection with its review of the
Disney transaction. This information largely overlaps with the
information that the DOJ will need to review a Comcast transaction. As a result, our transaction should be
reviewable by the DOJ in the same cycle as Disney’s transaction. We
similarly expect that our transaction should be reviewable by
international regulators in as timely a manner as the Disney
transaction, and should be as or more likely to receive
international approvals, given our relatively small presence outside
Our Board of
Directors has unanimously approved this proposal, and no
Comcast shareholder vote will be required for this
Because of your
decision to schedule the vote on the
Disney merger proposal for July 10, time is of the
essence for your consideration of our proposal. We are available to
meet at any time to answer questions of the Board, management or
your advisors, so that you are in a position to validate the
superiority of our offer, and negotiate and enter into a merger
agreement, as soon as possible thereafter. Given the very short time
frame, today we are filing a preliminary proxy statement with the
SEC in opposition to the Disney merger proposal, as we
have been advised this is necessary to be in a position to be able
to communicate with your shareholders directly regarding the votes
they are being asked to cast on July 10. We hope this
is precautionary only, as we expect to work together to reach an
agreement over the next several days.
information regarding our proposal is attached.
I look forward to our
discussions and working with you toward completing this exciting
transaction for the Fox shareholders.
Very truly yours,
/s/ Brian L.
Chairman and CEO
COMCAST’S SUPERIOR PROPOSAL TO ACQUIRE TWENTY-FIRST CENTURY FOX
proposes to acquire 100% of the outstanding shares of 21CF for
$35.00 per share in cash, reflecting a $65 billion
equity value for 21CF (after giving effect to the proposed spinoff
of New Fox) and a premium of approximately 19% to the value of
Disney’s offer as of noon today.
Our all-cash proposal
will provide 21CF shareholders with certain value and immediate
liquidity. Our proposal is not subject to a financing condition. We
have received Highly Confident Letters from Bank of America
Merrill Lynch and Wells Fargo.
We have prepared a
draft merger agreement reflecting the terms described herein and our
legal team of Davis Polk and Wachtell Lipton are
available to meet with their appropriate counterparts to discuss and
review the document. Our draft merger agreement differs from the
Disney agreement only to reflect the superior terms described in this
letter, to adapt the agreement to reflect an all-cash transaction
Comcast shareholder vote) and to
provide greater certainty by eliminating the need for any 21CF
charter amendments. Our draft is subject to review of any material
non-public information relating to 21CF’s proposed transaction with
Disney, including with respect to Disney’s regulatory
undertaking and the separation of New Fox.
We have revised our
proposal to specifically address the 21CF Board of Directors’ stated
concerns regarding the treatment of any required regulatory
divestitures, including their tax costs, and a reverse termination
will agree to the same divestiture package as Disney,
i.e., a commitment to
divest (i) any of 21CF’s RSNs and (ii) other 21CF assets
representing up to $500 million
of EBITDA (less up to $250 million of EBITDA
attributable to divested RSNs).
We will agree to the
same allocation of any tax obligations as Disney in
connection with any required divestitures.
We will agree to the
same reverse termination fee of $2.5 billion as
Disney, in the event the transaction does not close as a
result of a failure to obtain the required regulatory approvals.
We will also agree to
behavioral restrictions as extensive as those agreed to by
Disney and, like Disney, we will also agree to
litigate any action taken by the Department of Justice to
block the transaction.
Disney Break-Up Fee
In addition to our
payment of the $2.5 billion reverse termination fee,
in the unlikely event that our transaction is terminated due to a
failure to obtain the required regulatory approvals, we will also
agree to reimburse 21CF for the $1.525 billion
break-up fee required to be paid to Disney in connection
with termination of the Disney transaction and entry into
a merger agreement with us.
has separately announced, pursuant to Rule 2.7 of the UK City Code on
Takeovers and Mergers, a pre-conditional all-cash firm offer for the
entire issued and to be issued share capital of Sky plc.
We intend to pursue this offer in parallel with our acquisition of
21CF. Of course, the terms of any transaction between
Comcast and 21CF will need to be consistent with our
respective obligations under the UK takeover regime.