Lachlan Murdoch opened 21st Century Fox’s call with investors after its quarterly earnings report by addressing recent press reports of “the potential of a further offer for our business.”
Murdoch, echoing sentiment from Disney chief Bob Iger, signaled confidence that the Disney acquisition will proceed as planned. He said the company filed a detailed proxy filing and noted that, once regulatory review is finalized and the deal clears FCC review, “we will request shareholder approval this summer of the merger and creation of a New Fox.” At that time, Murdoch said the company would announce “the new company’s leadership team.”
He did not specifically address a Wall Street Journal report that James Murdoch would leave the corporate fold and launch his own venture capital firm.
Multiple reports earlier this week said Comcast had met with bankers to line up financing for a $60 billion, all-cash offer for the Fox assets. The unsolicited bit is well north of Disney’s pending $52.4 billion transaction. Comcast had also made a sweeter offer than Disney’s last fall, but ultimately the Murdochs chose the Disney offer, for various reasons.
On Disney’s quarterly call yesterday, Iger sidestepped questions about the rival bid, though he never actually said the word “Comcast” during the call. “We are still deep in the regulatory process so I can’t share any more information or engage in further speculation about the deal,” he said, “except to say that we strongly believe in the value of those assets.”
The stakes are significant for Disney, not just strategically. It would owe $2.5 billion as a breakup fee if the deal doesn’t close, while Fox would have to pay $1.5 billion.
Asked by BTIG analyst Rich Greenfield whether the combo with Disney is the only one the company would consider, Lachlan Murdoch reiterated, “We’re not going to engage in speculation around this. We are committed to our agreement with Disney and are working through conditions to bring it to closing.”
Opening the door a crack, Murdoch added, “Our directors are aware of their fiduciary responsibilities,” seemingly implying that multiple bids would be evaluated. Greenfield pressed the matter, asking if Fox would consider an offer that included a significant break-up fee and regulatory protections. CFO John Nallen stepped in to reiterate, “The directors are well aware of their responsibilities.”