The Rebooted "Keep Hope Alive" (that the rights can revert back to Marvel) Thread - - - - - - - - - Part 18

[Willie Lumpkin]

The Disney shareholders vote in July to authorize or not. The vote packets with specifics are being sent. I've seen 3 of them now.

But those will have to be scrapped if Disney ups their bid. But they can still add an addendum and have their vote based on a modified bid quicker than Comcast, and I think that's a big stealth factor working in Disney's favor.

Since Disney already has a vote scheduled, they can, relatively simply, modify the details and continue on schedule. Comcast doesn't even have a vote scheduled, so Fox can expect quicker approval from Disney (plus Disney has more resources and Disney's shareholders are more likely to be onboard with their offer than Comcsats's).

 

[Willie Lumpkin]

I see two possible scenarios playing out:

1. Comcast runs out of resources fairly quickly and Disney wins with a relatively small modification to their initial bid.

or

2. If the bidding goes back and forth and starts really rising, I think an a la carte sale becomes more likely. If both Disney and Comcast start getting to the point their resources are being stretched, I think all three parties sit down and start deciding what things are most important to them and they start dividing things up. If that happens, I'd expect Disney to Walk away with a lot of content for their new streaming service and Comcast to get Sky, Hulu and other distribution assets.

 

[ADollarADay]

DIS is rallying up this morning. CMCSA is pretty flat. FOX/FOXA are up huge as expected.

 

[Willie Lumpkin]

DIS is rallying up this morning.

That's surprising, but seems to be saying the market likes Disney's chances. Is it just coming off lows from after-hours trading, or is it at or above where it was before the ruling?

 

[Willie Lumpkin]

Wow! I see it's spiking above where it was all last week. That's really weird, but encouraging.

 

[Crimz]

Doesn't Incredibles 2 come out today? Could that be the reason for the spike?

 

[ADollarADay]

Wow! I see it's spiking above where it was all last week. That's really weird, but encouraging.

DIS is the highest it's been since Feb 2018. Don't take it as an encouraging sign that Disney is going to win the bid. It's actually the opposite as the market expects the buyer to overpay for 21CF's assets and the market expects CMCSA to win that bid. That's one of the reasons DIS is up, FOX/FOXA is up significantly, and CMCSA is down.

On the plus side it means that Disney's offer is almost the same as it was in December 2017 (as the stock goes down, so too does the overall bid. The inverse is also true).

 

[Willie Lumpkin]

Doesn't Incredibles 2 come out today? Could that be the reason for the spike?

Not likely. The reviews for Incredibles 2 came out (Monday, I think), so it's baked in and also a small factor compared to this merger.

I think investors believe Disney has the resources and will to beat Comcast and, like I mentioned yesterday, because of the ruling, this means that when Disney wins, they'll sail through approval. I think that belief is why it's spiking.

And by the way, Comcast was hoping Disney's stock would drop and reduce the value of their bid. Sucks to be Comcast right now.

 

[Iceman]

That's surprising, but seems to be saying the market likes Disney's chances. Is it just coming off lows from after-hours trading, or is it at or above where it was before the ruling?

The company looking to takeover is usually the one that sees a stock price decline as they pay a premium to buy assets (unless the assets are distressed) on the basis they can add value to them (which is not certain at the time).

 

[Iceman]

Doesn't Incredibles 2 come out today? Could that be the reason for the spike?

A film coming out, even a huge one, is no reason for a stock price to move. The expectations for how that film will do are already reflected in the stock price and only a significant surprise (like Black Panther or Han Solo) will be relevant to price. Also Incredibles is not important enough on its own to materially affect the overall share price of Disney.

 

[Willie Lumpkin]

DIS is the highest it's been since Feb 2018. Don't take it as an encouraging sign that Disney is going to win the bid. It's actually the opposite as the market expects the buyer to overpay for 21CF's assets and the market expects CMCSA to win that bid. That's one of the reasons DIS is up, FOX/FOXA is up significantly, and CMCSA is down.

That might be in some people's thinking, but I don't buy it as the primary mover. Disney's stock reacted very positively when the deal was rumored and announced. At this point, Disney investors expect and want this deal to go through, and if Comcast gets it and Disney doesn't, that will put Disney at a competitive disadvantage. I think the positive move is much more attributable to investor's belief that yesterday's ruling removed the regulatory hurdle that they saw standing in the way of this deal closing.

 

[Iceman]

Moody's from Bloomberg:

If Comcast prevails, Moody’s Investors Service estimates that it would become the most*indebted*company after AT&T, with total obligations of more than $160 billion.

 

[Willie Lumpkin]

Moody's from Bloomberg:

Yeah, I think Comcast is skating a very thin line and I think $60 billion may be about as high as they can go. And I'm not sure if that even beats Disney's current offer. Disney might be able to throw an extra $5 billion cash on top of their current offer and that could be the end of any "bidding war".

 

[Iceman]

Yeah, I think Comcast is skating a very thin line and I think $60 billion may be about as high as they can go. And I'm not sure if that even beats Disney's current offer. Disney might be able to throw an extra $5 billion cash on top of their current offer and that could be the end of any "bidding war".

Yeah, we have no idea what Disney is prepared to do in response as of yet or how far they are prepared to go.

 

[Detective Conan]

Yeah, we have no idea what Disney is prepared to do in response as of yet or how far they are prepared to go.

I’m afraid Disney may abandon the deal with Fox in favor of going after Sky. I actually think Sky May be worth to Iger than the Fox assets. I hope I’m wrong.

 

[wobbly]

Both sides will have a ceiling as to how far they will, or feasibly can, go.

I would think Iger does have wriggle room to up the ante for Disneys bid. Whether his ceiling is bigger & better than Roberts (as far as Fox shareholders goes) remains to be seen.

I don't see Iger just walking from the deal for the break up fee unless Comcast go waaay above the market value for Fox's shares. If they do launch a huge OTT bid that puts them not only into debt but immediately down several billion bucks on share value I could see Iger saying 'Ok, you can have Fox, we'll have our fee, and you guys have fun dealing with that totally unnecessary debt'.

 

[Iceman]

Both sides will have a ceiling as to how far they will, or feasibly can, go.

I would think Iger does have wriggle room to up the ante for Disneys bid. Whether his ceiling is bigger & better than Roberts (as far as Fox shareholders goes) remains to be seen.

I don't see Iger just walking from the deal for the break up fee unless Comcast go waaay above the market value for Fox's shares. If they do launch a huge OTT bid that puts them not only into debt but immediately down several billion bucks on share value I could see Iger saying 'Ok, you can have Fox, we'll have our fee, and you guys have fun dealing with that totally unnecessary debt'.

Comcast have managed the situation really badly. If they were going to bid then they should have been active much earlier before any breakup fee was needed and while they could have been battling on even terms with Disney rather than having to outdo them significantly, with Fox already happy with and supportive of Disney's bid.

 

[Willie Lumpkin]

I’m afraid Disney may abandon the deal with Fox in favor of going after Sky. I actually think Sky May be worth to Iger than the Fox assets. I hope I’m wrong.

IF Disney does really want Sky, their best route is to buy Fox first, because Fox owns a big chunk of Sky.

But despite the public rhetoric, I think Comcast wants Sky more than Disney does, and I can imagine Disney upping their bid for Fox and then defraying some of that cost by selling the share of Sky they'll get with it to Comcast for a premium.

 

[Willie Lumpkin]

Both sides will have a ceiling as to how far they will, or feasibly can, go.

I would think Iger does have wriggle room to up the ante for Disneys bid. Whether his ceiling is bigger & better than Roberts (as far as Fox shareholders goes) remains to be seen.

I don't see Iger just walking from the deal for the break up fee unless Comcast go waaay above the market value for Fox's shares. If they do launch a huge OTT bid that puts them not only into debt but immediately down several billion bucks on share value I could see Iger saying 'Ok, you can have Fox, we'll have our fee, and you guys have fun dealing with that totally unnecessary debt'.

In terms of real, hard ceilings, I think Disney's is much higher than Comcast's.

I think with Comcast, their top bid will be limited by what creditors are willing to lend them and what level of debt they can realistically carry.

With Disney, their top bid will be limited by what they think it's really worth. I think Disney will stop long before they've hit a real 'ceiling'.

 

[Orba]

A factor too is that Disney has $100 billion in treasury stock they can use in their bid. As long as Fox are willing to accept some of the bid in stock then it reduces the amount of cash Disney will be looking to borrow compared to Comcast.

 

[Dark Raven]

I thought Iger said recently that they don't have to have Sky in order to proceed with the deal. That it wasn't absolutely essential. Now the way some people are speaking here is as if it IS absolutely essential and more so than the rest of the Fox assets.

So what does he actually want? Fox or mostly Sky?

If they were prepared to let Sky go, then perhaps everyone could walk away with something. They should definitely not let go of the New Hope and the Marvel rights.

 

[ADollarADay]

https://seekingalpha.com/news/33637...fox-assets-setting-disney-war?dr=1#email_link

It's a total bid of $65B, $35/share in cash, a premium of about 19% to Disney's offer.

 

[Marvel united]

Here we go https://www.google.com/amp/s/amp.cnn.com/money/2018/06/13/media/comcast-fox-bid/index.html

Comcast has officially bid. Now we'll see what Disney's response will be

 

[ADollarADay]

Comcast is also offering to pay the 1.525B termination fee + 2.5B breakup fee if it's blocked by regulators for a total 4.025B on top of the 65B offered to 21CF.

https://***********/oliverdarcy/sta...o/iframe/twitter.min.html#1006991152703328256

 

[Erik Lensherr]

BREAKING: Comcast makes $65 billion all-cash bid for Fox
https://variety.com/2018/biz/news/comcast-bid-fox-disney-media-1202844736/