Takeover battle: Disney/Fox reach $71B deal, blowing away Comcast

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Disney originally bid $28 a share back in December.

Disney is locked in a battle with USA media conglomerate Comcast, which has offered $65bn in cash for Fox.

This makes life hard for Comcast, which is already borrowing extravagantly and would become one of the most indebted companies in the world if it bought Fox. If a better offer isn't made, this will be the deal that moves forward. In morning trading, shares of Twenty-First Century Fox rallied 6 percent to $47.47. The acquisition will occur immediately after the spin-off by 21st Century Fox of the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company referred to as New Fox.

Disney is making a $70.3 billion counterbid for Fox's entertainment businesses following Comcast's $65 billion offer for the company. The deal will be approximately 50% cash and 50% stock, and debt will be used to partly finance the transaction.

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"The ball is now in Comcast's court", wrote New Street research analysts in a report.

The tie-up "is an extremely compelling proposition for consumers that will allow us to create even more appealing high quality content, expand our direct to consumer offerings, an global presence and deliver more exciting and personalized entertainment experiences to meet the growing demands of consumers worldwide", Iger told a conference call.

The US government is now suing to block a merger between Time Warner, and the telecoms giant AT&T. In a statement Wednesday Disney said it is raising its offer because Fox's value increased due to "tax reform and operating improvements". Fox and Disney shareholders had been scheduled to vote on Disney's original bid July 10, but that meeting has been postponed.

Rupert Murdoch, executive chairman of Fox, said: "We are extremely proud of the businesses we have built at 21st Century Fox and firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace at a dynamic time for our industry". In the wake of Judge Richard Leon clearing the $85 billion proffer - effectively allowing AT&T to absorb Time Warner - Comcast unveiled its proposal for the rights to intellectual properties owned by 21st Century Fox - including Deadpool, the Fantastic Four and the X-Men.

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