Yahoo Finance Glass Lewis and ISS urge Fox investors to accept Disney deal over Comcast
Two influential shareholder advisory groups, ISS and Glass Lewis, have recommended 21st Century Fox shareholders accept Disney's $71bn (£54bn) bid over the rival offer tabled by Comcast.
Disney's offer for Fox's entertainment assets is higher than Comcast's, at around $38 per share compared to $35 per share. It had made the first move to buy the Murdoch assets, including Fox's Sky stake, back in December, but sweetened that offer last month after Comcast lodged its formal bid.
Comcast has yet to respond with a new offer for the Fox assets.
Shareholders will be asked to vote on the Disney deal at a meeting on July 27, and both ISS and Glass Lewis recommended they approve the motion.
Glass Lewis said the Disney deal offers "a unique, prospectively far-reaching opportunity to aggregate a collection of established properties, distribution channels and growth alternatives at a time in which the foundational architecture of traditional media is increasingly challenged by predominantly digital market entrants".
ISS added that, while the initial sales process was "suboptimal, as the company’s apparent preference towards a deal with Disney clearly failed to extract maximum value for shareholders", it said the current deal now represents "compelling value".
The publication of the two reports comes less than 24 hours after the US moved to appeal a landmark court ruling which had paved the way for more so-called "vertical" tie-ups in the media space.
A federal court last month decided to throw out the US Department of Justice's arguments that a deal between A&T and Time Warner would hamper competition, given that the two are not direct competitors.
Many companies in the media and telecommunications sector had been watching the ruling closely, to see whether the courts would agree that such deals should be blocked, including Comcast which made its Fox bid the day after the court decision.
Speaking earlier today to CNBC, AT&T chief executive Randall Stephenson said, when it came to the appeal "obviously, it does affect that process".
"You’re in a situation where two entities are bidding for an asset, and this kind of action can obviously influence the outcome of those actions," he said.
As well as attempting to gatecrash Disney's bid for Fox, Comcast has also been seeking to clinch a deal for the 61pc of Sky that Fox does not alrady own, challenging Fox which is also trying to buy those shares.
The bidding war between the pair escalated on Wednesday night, when Fox hiked its offer only for Comcast to come back in late in the evening with an even higher bid.
If Fox is successful in buying the Sky shares, it has agreed to spin off Sky News to Disney to ensure the news outlet's editorial independence.