VALUATION CHANGES ASSOCIATED WITH THE FOX/DISNEY DIVESTITURE TRANSACTION
VALUATION CHANGES ASSOCIATED WITH THE FOX/DISNEY DIVESTITURE TRANSACTION

Summary/Abstract: The purpose of this paper is to examine and calibrate valuation changes associated with the negotiating firms in a significant Corporate Control Contest and Media Restructuring. It identifies, discusses, and measures the valuation consequences for the shareholders of Fox, Disney, and Comcast of each step. In the restructuring, Mergers and Acquisitions of whole firms get most of the attention in the headlines, but often Divestiture transactions involving PARTS of firms are large and significant transactions for the firms involved. Media firms have been undertaking an extremely high level of restructuring as they work to manage the consequences of regulatory change, technological developments and their implications for the delivery of media products, and the associated changes in the competitive structure of the industry. The large scale of DIVESTITURE restructuring by media firms is illustrated by the 2018 transaction involving substantial portions of 21st Century Fox. The whole Fox company is not being sold. But in this study we document the significant value changes for the firms involved as the transaction evolved from November 2017 through July 2018. The transaction created added value for the shareholders of 21st Century Fox of $36 billion. Given that Mr. Murdock created Fox, some were puzzled that he was interested in selling such a substantial portion of the firm. His decision reflects the maxim of successful business people that “all assets are for sale at the right price.”

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