21st Century Fox, Disney held takeover talks

Fox shares rise more than 5 per cent on news of the takeover discussions.

Walt Disney Co. has recently held talks to buy 21st Century Fox’s cable-television networks, international distribution operations and movie and television studio, according to people close to the discussions, a tie-up that would bolster Disney’s dominance in Hollywood and allow Fox to focus on sports, news and broadcast television.

The talks were no longer active by Monday afternoon when CNBC first reported them, according to one of these people. They were very preliminary and broke down over price and other key deal terms, according to another person.

Included in the assets Disney would acquire was Fox’s 39 per cent stake in Sky PLC, the UK -based pay-television giant, this person added. Fox has bid $15.5 billion to buy the rest of Sky to help expand its global media empire, but the deal has been held up by the UK government as it continues to review whether the acquisition would put too much power in the hands of one media company.

The Fox assets under discussion could bolster Disney’s struggling television business, significantly increasing its exposure to foreign markets in which Fox has a stronger presence. It also would provide additional content for a streaming service Disney is planning to launch in the next two years.

Fox assets Disney didn’t discuss buying included its broadcast-television network, local stations and sports channels, this person said.

Fox shares quickly rose more than 5 per cent on news of the talks, while Disney stock was up less than 1 per cent.

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