The Walt Disney Company and 21st Century Fox announced on Friday (July 27) that stockholders of both companies have separately approved the proposed acquisition by Disney of the latter’s entertainment assets.
The proposals included the adoption by 21st Century Fox stockholders of the merger agreement with Disney and the distribution merger agreement for the spin-off of new ‘Fox.’
Disney stockholders approved the issuance of new common stock that will be distributed to 21st Century Fox stockholders as part of the acquisition.
Final voting tallies from the 21st Century Fox and Disney special meetings are subject to certification by the companies’ respective inspectors of elections, and will be included in reports to be filed by 21st Century Fox and Disney with the Securities and Exchange Commission.
“Combining the 21CF businesses with Disney and establishing new ‘Fox’ will unlock significant value for our shareholders,” said Rupert Murdoch, 21st Century Fox executive chairman. “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.”
“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,” said The Walt Disney Company chairman and CEO Bob Iger.
“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.”
Under the deal, 21st Century Fox stockholders may elect to receive $38 per share in either cash or shares of New Disney, a new holding company that will become the parent of Disney and 21st Century Fox.
The consideration may be subject to adjustment for certain tax liabilities, and the overall mix of consideration paid to 21st Century Fox stockholders will be approximately 50% cash and 50% stock. The stock consideration is subject to a collar, which will ensure that 21st Century Fox stockholders will receive consideration equal to $38 in value if the average Disney stock price at closing is between $93.53 and $114.32.
Disney expects to pay a total of about $35.7bn in cash and issue approximately 343m New Disney shares to 21st Century Fox stockholders. As a result, current 21st Century Fox stockholders will own a 17-20% stake in New Disney on a pro forma basis.
Last month, the US Department of Justice gave its blessing to the merger while requiring the sale of the Fox Sports Regional Networks. Completion of the transaction is subject to non-US merger and other regulatory reviews, and other customary closing conditions.