Fox and Disney shareholders say yes to deal

21st Century Fox and Disney shareholders have approved the acquisition of Fox’s entertainment business by Disney.

Fox shareholders approved the company’s merger agreement with Disney and the agreement for the distribution of shares related to the spin-off of the ‘new Fox’ company headed by Lachlan Murdoch that will house Fox News and Fox Business Network as well as sports networks and local TV stations.

Under the merger agreement, Fox shareholders may elect to receive US$38 (€33) per share in either cash or shares of New Disney, a new holding company that will become the parent of both Disney and 21st Century Fox.

The stock consideration is subject to a collar, meaning that 21st Century Fox stockholders will receive equal to US$38 in value if the average Disney stock price at closing is between US$93.53 and US$114.32.

Disney expects to pay a total of about US$35.7 billion in cash and issue approximately 343 million New Disney shares to 21st Century Fox stockholders, meaning that Fox stockholders will own a 17-20% stake in New Disney on a pro forma basis.

The shareholders’ approval follows approval of the deal by US regulators. The transaction remains subject to approval by non-US regulators.

The vote underlined the ending of the battle between Disney and Comcast for control of Fox’s entertainment assets, which had seen the price to be paid by Disney increase significantly from its original offer. Comcast chairman and CEO Brian Roberts threw in the towel the week before last and congratulated Walt Disney Company chairman and CEO Robert Iger on his success. Comcast is instead focusing on its ongoing battle with 21st Century Fox for control of pay TV outfit Sky, Fox’s 39% share of which is one of the assets being acquired by Disney.

“Combining the 21CF businesses with Disney and establishing new ‘Fox’ will unlock significant value for our shareholders. We are grateful to our shareholders for approving this transaction. I want to thank all of our executives and colleagues for their enormous contributions in building 21st Century Fox over the past decades. With their help, we expect the enlarged Disney and new ‘Fox’ companies will be pre-eminent in the entertainment and media industries,” said Rupert Murdoch, executive chairman, 21st Century Fox.

“We’re incredibly pleased that shareholders of both companies have granted approval for us to move forward, and are confident in our ability to create significant long-term value through this acquisition of Fox’s premier assets. We remain grateful to Rupert Murdoch and to the rest of the 21st Century Fox board for entrusting us with the future of these extraordinary businesses, and look forward to welcoming 21st Century Fox’s stellar talent to Disney and ultimately integrating our businesses to provide consumers around the world with more appealing content and entertainment options,” said Robert Iger, chairman and CEO, The Walt Disney Company.

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