Rupert Murdoch had one more blockbuster deal in him. And it might be the grizzled veteran’s sweetest yet.
The 87-year-old mogul is poised to complete a $71 billion sale of selected 21st Century Fox Inc. assets to Walt Disney Co. While Murdoch’s track record is mixed -- the 2005 investment in MySpace was a half-billion dollars he never saw again -- this transaction will cement his legacy as one of the media world’s top wheeler-dealers. After competition from Comcast Corp. pushed Disney to boost its winning bid, Murdoch stands to add about $3 billion of Disney stock to what Bloomberg Billionaires Index estimates is already a $18.1 billion fortune.
Murdoch is “one of the all-time greats,” Discovery Inc. Chief Executive Officer David Zaslav said last week in an interview at Allen & Co.’s annual media conference, which was attended by Murdoch, his sons James and Lachlan, as well as the CEOs of Disney and Comcast, Bob Iger and Brian Roberts.
’Twas Drama
Getting the deal done wasn’t always a streamlined process. There was drama along the way. When Murdoch and Iger met for a friendly chat in August at Murdoch’s 13-acre Moraga Estate vineyard in Los Angeles, they reflected on the challenges of the rapidly evolving media industry and discussed potential solutions, including a deal between the two companies, according to regulatory filings.
Fox opted to sell pieces of its empire. They include the movie studio, cable networks like FX, stakes in streaming-video company Hulu, broadcaster Sky Plc, and interests in Star India and National Geographic. Disney would buy, then sell, Fox’s regional sports networks to meet regulatory requirements.
What was left, called “ New Fox,’’ would be spun off and led by elder son Lachlan. New Fox includes the cable-news division, starring Sean Hannity and Tucker Carlson, national sports channels and the U.S. broadcast channel, famous for shows such as “The Simpsons’’ and “American Idol.’’
The Murdoch family could net as much as $11.8 billion from the deal. That doesn’t include the 17 percent stake in New Fox. Though other analysts have a more conservative valuation, Bloomberg Intelligence says New Fox is worth about $17 per share, or $31 billion.
Comcast Persistence
In December, Fox accepted a Disney bid of $29.54 a share. Proxy adviser Institutional Shareholder Services Inc. said the initial sales process was “suboptimal.’’ Fox’s “apparent preference toward a deal with Disney clearly failed to extract maximum value for shareholders,” ISS added.
Fox investors have the persistence of Comcast’s Roberts, and his unsolicited $35-a-share offer, to thank for ultimately forcing Disney to sweeten its bid by 28.6 percent, to $38 a share. That translates to a 56 percent premium to the value of Fox shares on Nov. 3, 2017, the day before the sale discussions went public, said ISS, which along with shareholder adviser Glass Lewis & Co., says investors should support the deal when they vote on July 27.
Murdoch has done a “masterful job,” said Paul Sweeney, a Bloomberg Intelligence analyst. “He is getting pretty heady multiples.”