21st Century Fox (NASDAQ: FOXA) has been holding talks to sell most of the company to Walt Disney Co, (NYSE: DIS) leaving behind a media company tightly focused on news and sports, according to people familiar with the situation.
The talks have taken place over the last few weeks and there is no certainty they will lead to a deal. The two sides are not currently talking at this very moment, but given the on again, off again nature of the talks, they could be revisited.
For Disney, the opportunity to take control of another movie studio and significant TV production assets as it readies a direct-to-consumer entertainment streaming offering is attractive as is Fox's significant exposure to international markets, such as the U.K., Germany and Italy — both through its networks and 39% ownership of Sky.
Disney recently announced it will pull all of its movies from the Netflix (NASDAQ: NFLX) platform and will establish two direct-to-consumer offerings: one for sports and one including its key franchises such as "Star Wars" and Marvel.
Disney would not purchase all of Fox, according to people with knowledge of the talks.
The company could not own two broadcast networks and would therefore not buy the Fox broadcast network. It would not buy Fox's sports programming assets in the belief that combining them with ESPN could be seen as anti-competitive from an antitrust standpoint and it would not buy the Fox News or Business channel.
Shares in Fox soared 73 cents, or 2.7%, early Tuesday morning, to $28.18, while Disney shares gained $1.07, or 1.1%, to $101.71.
