Thursday, 14 December 2017

Another takeover for Disney, another spin-off for Fox

  • For 21st Century Fox: $52.4b in stock; 515m new DIS shares = 25% pro forma; 0.2745 DIS for 1 FOX; plus $13.7b debt (equity value 52.4b, enterprise value 66.1b)
  • Targets $2b cost savings from efficiencies
  • Iger remains Chair/CEO through 2021
  • Prior to offer:
    • to spin off Fox Broadcasting Co, Fox TV Stations, Fox News, Fox Business, FS1 & FS2, Big Ten Network in newly listed company New Fox (2017E rev $10b, EBITDA $2.8b), to pay $8.5b dividend for tax liability of spin-off
    • Fox to close the buy out of 61% of Sky prior by 180630
  • To be acquired:
    • TV studios 20th Century Fox TV, FX Productions, FX21.
    • Film studios: 20th Century Fox, Fox Searchlight, Fox 2000
    • cable entertainment networks
    • international TV businesses
      • Fox Networks International (>350 channels in 170 countries)
      • Star India (69 channels in >100 countries)
      • Sky (23m subs in 5 countries)
      • stakes in Roku, Endemol Shine, Hulu (to be controlled), Tata Sky
    • titles/franchises: X-Men, Fantastic Four, Deadpool, The Simpsons, Avatar, NatGeo
  • Disney
    • complement & enhance (earlier content deals: Lucasfilm, Pixar, Marvel)
    • stronger D2C offerings (Hulu, planned SVOD services Disney & ESPN), control of Hulu
    • efficiencies
  • Fox: focus
    • first split News (newspapers) off to create 21st Century Fox
    • next split New Fox (TV channels US) off to sell 21st Century Fox to Disney
  • Studio majors remaining:
    • Walt Disney: Disney, Lucasfilm, Marvel Studios, Pixar, Walt Disney Animation, Touchstone, 20th Century Fox, Fox Searchlight, Blue Sky, Regency
    • Time Warner: Warner Bros, New Line, Cartoon Network, Castle Rock
    • Comcast: Universal, Focus Features, Working Title, Gramercy, DreamWorks Animation
    • Sony: Sony Pictures, Columbia Pictures, TriStar
    • Viacom: Paramount Pictures, Nickelodeon

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