A lawsuit has broken out between the two media moguls Disney and 21st Century Fox, centering around the sale of Fox’s assets to Disney. A Fox shareholder has complained about what was filed with the Securities and Exchange Commision. Last Friday, in Delaware federal court Robert Weiss filed his lawsuit, as leader of the shareholders.
Disney is attempting to acquire a large portion of Fox’s assets, which includes international channels such as Sky and Star as well as Fox’s movie studio, 20th Century Fox. This past December, Disney made an official offer for the Fox assets valuing $52 Billion. Fox accepted this initial offer, however, Comcast took the opportunity to insert themselves into the deal and outbid Disney with a $65 billion offer. Fox did not accept Comcast’s deal, but they did set a date to allow their shareholders to vote on the matter. While the voting was being decided upon, Disney retaliated with a $71 billion offer, which Fox accepted and is currently moving forward with.
The Fox shareholders are expected to vote on the deal on July 27th, and Fox’s board has encouraged them to vote for the Disney deal, but now one of the Fox shareholders is claiming that Disney has made some mistakes in their SEC filings, and is using that information as cause to sue.
Said shareholder, Robert Weiss, is concerned with the lack of information about projections for Hulu and earning estimates or European broadcaster Sky in the future.
“In short, unless remedied, 21CF’s public stockholders will be forced to make a voting or appraisal decision on the Proposed Transaction without full disclosure of all material information concerning the Proposed Transaction being provided to them,” Weiss’ lawsuit states.
Fox is accused of multiple security violations and if the Fox-Disney transaction isn’t enjoined on a preliminary basis, the Fox shareholder wants the deal rescinded and also would like an award of rescissory damages. This lawsuit creates a roadblock in the Fox-Disney deal, and if it is not remedied in the near future the whole deal could be affected.
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