Disney Ups Bid for Fox’s Entertainment Businesses to $71.3 Billion

The bidding war over 21st Century Fox reached a new peak on Wednesday as Walt Disney announced it was upping its offer to $71.3 billion, days after Comcast made a competing offer of $65 billion and hours before the Fox board met to discuss the bid.

The news heavily swings the advantage back to Disney to acquire some of the most valued assets in the entertainment world as pressures from Silicon Valley on legacy companies mount.

“When I saw the news the first word uttered out of my mouth was ‘wow,’ ” said Andrew Hulsh, a partner in the law firm Pepper Hamilton who specializes in mergers and acquisitions. “This is Disney throwing down the gauntlet with a superior offer. They’re saying we really want these assets and the buck stops here.”

In December, Disney offered $52.4 billion in stock for the bulk of Fox assets, before Comcast swooped in with its all-cash offer last week.

On Wednesday, Disney said its offer would be for a mix of cash and stock and would allow shareholders to choose which they preferred — up to 50 percent could be in cash.

The company said it would pay $35.7 billion in cash and issue roughly 343 million new shares to 21st Century Fox shareholders.

Disney also will assume about $13.8 billion of net debt of 21st Century Fox.

The deal puts the ball back in Comcast’s court on whether they would make a new offer or walk away and let Disney grab the Fox ring.

But many analysts say that Disney’s move will be tough for Comcast to recover from.

Of greatest concern to analysts about a Comcast retort involved the debt. Comcast’s ability to finance an acquisition was already in question before Wednesday; having to up its offer at least 10 percent to match Disney could push it further to the brink.

“The debt they’d need to take on to make a deal would plunge them into such a massive hole that I’m not sure they could do it,” said Hugh Tallents, an M&A expert at management consultancy cg42. Disney is widely believed to have the stronger balance sheet, while Comcast would require more outside bank support to make a deal.