Just some thoughts here…
Now that AT&T has won their court case, and the way is clear for them to buy Time Warner, the main event bout between Disney and Comcast has begun in chief. 20th Century Fox is the prize in this fight, and both the contenders are trying to put their best foot forward in order to win Fox’s affections. I am of two minds about this corporate battle for Fox’s business.
As a stockholder, from looking at the two bids, if I have to choose one of these companies, I would choose Disney. True, Comcast’s offer is an all-cash offer, but as any who works or buys products knows, there will be a tax on that money. That money will actually be taxed and sliced into so many pies that by the end and all is said and done, stockholders will not get what they think they will or should get from the $65 billion dollar offer. There will be money taken off the top of the $65 billion dollars that was offered by Comcast before the shareholders even see any of it. Also, If I as Fox chose Comcast, I would have to pay $1.5 billion to Disney for reneging on the agreement that I had with them. True, with $65 billion on the table that doesn’t seem to be a lot, but with all the other taxes, fees, etc. that will be taken away from that $65 billion. Those dollars start to dwindle quickly.
If I chose Disney, I am choosing longevity in the market, instead of uncertainty. Disney has been on a tear in the movie and television industries of late. Their last five movie releases under the Disney umbrella worldwide to date have garnered almost $6 billion dollars alone, their stock value is only going to go up and up. Also, with the impending online service from Disney, that will be more money gained to send their stock prices up, therefore gaining more money and value to those former Fox shareholders. It’s about longevity and making the most money you can long term.
On the other hand, looking at it from Fox’s point of view. What they decided instead to split what they’re offering. What if they decide to offer Disney their movie division and all the properties that come with; and they offering Comcast their television division and all the properties that come with it. There would have to be some finagling and decisions on where certain properties call home, but as a stockholder, if the negotiators of this deal can get Disney and Comcast to agree to terms, this would be a win-win for me as a stockholder in 21CF.
There are just quite a few ways that Fox and its shareholders can go with this, but I was a stockholder and had to choose between one or the other, I’m choosing Disney.
